Oil prices slip with Trump comments on tariffs, production boost in focus

Oil prices were lower in afternoon European trade on Tuesday, as investors gauged President Donald Trump's tariff stance and his declaration of a national emergency aimed at shoring up US energy production.

Brent oil futures expiring in March fell 1.8% to $78.72 a barrel, while West Texas Intermediate crude futures dropped 2.6% to $75.42 a barrel by 08:58 ET (13:58 GMT). 

After taking office on Monday, Trump stopped short of rolling out harsh universal import tariffs, but suggested that he could slap levies of 25% on imports from Canada and Mexico on February 1. The statements led to volatile trading in the US dollar, which affects the cost of oil for buyers holding foreign currencies. 

Meanwhile, in a White House briefing Trump said he will declare a national energy emergency and use “all necessary resources” to build up America's energy infrastructure. 

Trump added that he will end former President Joe Biden’s climate change policies, halting curbs on energy production and use, while also allowing more mining and processing of non-fuel minerals. 

Trump also said he will end land leasing to wind farms, and that the US will withdraw from the Paris Climate Accord. 

The comments, while relatively scant on details, ramped up bets that US oil production will increase even further in the coming months, after averaging around record highs of 13 million barrels per day in 2024. Such a trend is tipped to offset at least some supply tightening from US sanctions against Russia and extended production cuts by the Organization of the Petroleum Exporting Countries. 

Separately, Trump flagged a hawkish stance against Venezuela, suggesting that the US was likely to stop buying oil from the country. Trump is expected to potentially impose tighter sanctions against the major oil producer, tightening crude markets. 

(Ambar Warrick contributed reporting.)

Source: Investing.com