Oil Prices Continue to Drop as Stockpiles Increase and Trump Takes Action

Oil prices dipped slightly following an industry report indicating the first rise in US crude inventories since mid-November, while market participants awaited further commitments on global trade from President Donald Trump.

Brent crude fell below $79 a barrel, continuing a streak of losses that began last Thursday, while West Texas Intermediate hovered around $75. The American Petroleum Institute reported a 1 million barrel increase in inventories last week, along with a significant rise in fuel stockpiles, according to a document reviewed by Bloomberg.

Typically, US crude inventories are reduced towards the end of the calendar year for tax advantages, with government data expected later on Thursday.

Despite recent dips, oil remains higher this year due to a robust start, driven by decreasing temperatures in the Northern Hemisphere that increased heating demand, and US sanctions against Russia’s oil sector, which have disrupted markets. India has expanded its support for Russian insurers to ensure a flow of discounted oil.

The market remains on alert for actions from the new Trump administration, following tariff threats aimed at China, Canada, and Mexico, as well as potential additional penalties on Moscow if President Vladimir Putin fails to engage in resolving the ongoing war in Ukraine.

“The tariff threats at this stage are just that—threats. They serve as bargaining tools,” commented Vandana Hari, founder of Vanda Insights in Singapore. “There may be some cautious optimism that Trump will reach an understanding with Putin, but the market will require more concrete assurances before factoring it in,” she added.

Prices:
Brent for March settlement decreased 0.3% to $78.74 a barrel at 12:10 p.m. in Singapore. WTI for March delivery fell 0.3% to $75.21 a barrel.

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