HG MARKETS:

As sentiment is weighed by worries about trade conflicts and oil market intervention by recently elected U.S. President Donald Trump, oil prices are set to see their first weekly decrease of the year. During his first days in office, Trump hinted that he would push OPEC and Saudi Arabia to cut oil prices, which increased market turbulence.

West Texas Intermediate (WTI) fell below $75, and Brent crude remained close to $78 a barrel, down roughly 3% for the week. During his first few days in office, Trump threatened to impose tariffs on China, Canada, and Mexico and promised to put pressure on oil producers to lower prices. Trump’s statement on Thursday that he would rather not impose tariffs on China caused the currency to momentarily weaken and helped crude regain some of its previous losses.

Despite higher prices earlier in the year due to a severe winter in the Northern Hemisphere and disruptions from U.S. sanctions on Russia, oil futures are expected to see their biggest weekly decline since November. If President Vladimir Putin is unable to negotiate an end to the crisis in Ukraine, Trump has alluded to further penalties against Russia. The supply of Russian oil has already been more restricted due to existing sanctions, which has compelled refiners in Asia to reevaluate their processing rates.

In order to boost domestic production, Trump signed an executive order announcing a national energy emergency. This move is in line with his previous demands that OPEC+ lower prices.

The Energy Information Administration said that U.S. crude stockpiles fell for the ninth straight week, deviating from previous industry projections of a gain and staying below the seasonal average of the past five years.