Investing.com– Oil prices fell slightly in Asian trade on Thursday, extending a recent downturn as traders braced for higher U.S. production under President Donald Trump while also awaiting more data on U.S. inventories.
Crude prices tumbled from a near six-month high in the past week, as uncertainty over Trump’s energy and trade policies weighed. The signing of a ceasefire between Israel and Hamas also sapped some risk premium from crude.
But overall losses in oil were still limited by expectations of increased heating demand, as a polar vortex sparked cold weather in the U.S. and Europe. Recent U.S. sanctions against Russia also underpinned oil with the prospect of tighter supplies.
expiring in March fell 0.3% to $78.80 a barrel, while fell 0.2% to $75.27 a barrel by 20:21 ET (01:21 GMT).
US inventories seen increasing after 5 weeks of draws- API
Data from the showed on Wednesday that U.S. inventories grew 1 million barrels in the week to January 17, after five straight weeks of draws.
The API data usually heralds a similar trend from , which is due later on Thursday.
A Reuters poll showed that analysts expect oil inventories to have shrunk last week, but product inventories likely increased.
Cold weather in the U.S. spurred increased demand for heating, while also disrupting crude production in the Gulf of Mexico. But it also disrupted travel in large swathes of the country, especially during the year-end holiday season.
Trump energy, trade policies in focus
Trump was a major weight on oil prices this week, as the 47th U.S. President declared a national energy emergency and vowed to sharply ramp up energy production in the coming months.
Trump called for higher oil production, while also walking back several climate-related curbs on the energy industry, in a likely bid to bring down energy prices and keep inflation in check.
Higher U.S. production- which already averaged at record highs of 13 million barrels per day in 2024- is likely to further loosen oil supplies, offsetting lower output in other parts of the world, especially the Organization of Petroleum Exporting Countries.
Trump’s trade policies were also a point of concern, given that he threatened to impose tariffs on several major economies, mainly China, Canada, and Mexico.
Any more economic pressure on China, the world’s biggest oil importer, is expected to further stymie its appetite for crude.
