On January 20, global oil prices remained steady amid tight supply conditions supporting the market. However, uncertainty surrounding energy policies under President-elect Donald Trump is putting pressure on investor sentiment.
Tight Supply Dynamics
According to the International Energy Agency (IEA), global crude oil supply has been declining due to recent production cuts by the Organization of the Petroleum Exporting Countries (OPEC+). Major producers like Russia and Saudi Arabia have maintained their commitment to output reductions, leading to the lowest oil inventories in five years.
Meanwhile, energy demand continues to rise as the economies of major countries like China and India rebound. This has resulted in a fragile market balance, vulnerable to long-term policy shifts and external shocks.
Concerns Over Trump’s Energy Policies
The inauguration of Donald Trump as president has sparked speculation about the direction of U.S. energy policies. In the past, Trump rolled back several climate-related regulations from previous administrations and opened natural reserves for oil exploration.
Experts suggest that a revival of policies favoring fossil fuel production could increase supply, potentially putting downward pressure on prices. However, such policies might face risks, including environmental backlash and international pressure to combat climate change.
Market Overview
Brent crude is currently trading around $85 per barrel.
WTI crude is hovering near $80 per barrel.
Investors are closely monitoring U.S. policy developments under Trump’s administration and forthcoming decisions from OPEC+ to assess the future trajectory of the energy market.
