Crude Oil Market Dips as Trump Reiterates US Plans to Boost Production

By Adedapo Adesanya

The crude oil market continued its downward movement on Thursday after the US President, Mr Donald Trump, repeated a pledge to raise his country’s oil production.

Consequently, the price of Brent crude futures fell by 32 cents or 0.4 per cent to $74.29 a barrel and the US West Texas Intermediate (WTI) crude declined by 42 cents or 0.6 per cent to $70.61 per barrel.

President Trump repeated a pledge to boost US production in a bid to lower oil prices and ease consumer inflation. The US is already the biggest crude producer in the world.

This move unnerved traders a day after the country reported a much bigger-than-anticipated jump in crude stockpiles.

Market analysts have questioned whether US oil producers will be willing to pump more barrels in the current market especially with Trump’s tariffs on Canadian and Mexican imports looming.

US government data from the Energy Information Administration (EIA) showed domestic crude stockpiles rose by 8.7 million barrels last week on Wednesday.

Prices also drew support from new US sanctions against individuals and entities for facilitating shipments of Iranian oil to China.

This is as President Trump reimposed a maximum pressure campaign against Iran, but also said he was open to a deal with the oil producing country.

The US said the tankers onboarded Iranian crude from storage in China as part of a scheme involving Iran’s military, which stands to profit from the sale of the oil.

The sanctions block access of the individuals and entities to any of their assets in the US and prohibit US foreign assistance.

China is also not sitting on its oars, it responded to the US blanket tariff of 10 per cent on all Chinese imports with several measured retaliatory tariffs, including a 15 per cent levy on LNG and 10 per cent on crude oil imports from the US.

US crude exports could slide to 3.6 million barrels per day this year, especially if the Trump Administration enacts the tariffs on Mexico and Canada – currently on pause until March 4.

Amid these developments, Saudi Arabia’s state oil company, Aramco has sharply raised prices for buyers in Asia.