Crude Oil Futures Dip as Trump Urges Saudi Arabia to Lower Prices

Crude oil futures fell on Friday morning following a call from U.S. President Donald Trump for Saudi Arabia to cut oil prices. The demand from Trump comes in light of the ongoing conflict between Russia and Ukraine, which he claims is being fueled by high oil prices.

Current Market Prices

As of 9:59 AM on Friday, March Brent oil futures stood at $78.20, reflecting a decrease of 0.11 percent. Meanwhile, March crude oil futures for West Texas Intermediate (WTI) were priced at $74.50, down by 0.16 percent. Additionally, February crude oil futures were trading at ₹6444 on the Multi Commodity Exchange (MCX), a drop of 0.62 percent from the previous close of ₹6484. March futures were also lower, trading at ₹6414 from ₹6450, down by 0.56 percent.

Trump's Comments at Davos

Speaking virtually at the World Economic Forum in Davos on Thursday, Trump placed the onus on Saudi Arabia to help lower oil prices, stating, "If the price came down, the Russia-Ukraine war would end immediately." He criticized the current high prices and urged for a reduction, adding that Saudi Arabia has a role to play in easing the conflict. Trump remarked, "They should have done it long ago. They’re very responsible, actually, to a certain extent, for what’s taking place." He also proposed that Saudi Arabia should revise their investment package with the U.S. from $600 billion to approximately $1 trillion.

Market Reactions

Warren Patterson, Head of Commodity Strategy at ING Think, noted that oil prices faced downward pressure following Trump’s comments at the World Economic Forum. He expressed skepticism about whether OPEC, an organization consisting of oil-producing nations, would agree to increase production given Russia's growing alignment with OPEC members and each member's need for higher oil prices to balance their budgets. As a result, influencing OPEC to raise output might be challenging.

U.S. Petroleum Inventory Report

Contributing to the market dynamics, the U.S. Energy Information Administration (EIA) reported a decline in crude oil inventories for the week ending January 17. Commercial crude oil inventories fell by 1 million barrels, bringing total inventories to 411.7 million barrels, about 6 percent below the five-year average for this time of year. Motor gasoline inventories rose slightly by 2.3 million barrels, but they remain 1 percent under the five-year average. Over the last four weeks, total petroleum supplied in the U.S. averaged 19.7 million barrels a day, up by 0.7 percent compared to the same period last year, while U.S. crude oil imports increased to an average of 6.7 million barrels a day, an increase of 621,000 barrels a day from the previous week.

In addition to crude oil, February natural gas futures on the MCX were trading at ₹300.40, up by 0.91 percent from the previous close. On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts rose to ₹8428 from ₹8402, an increase of 0.31 percent. In contrast, March jeera futures saw a decline, trading at ₹22375 compared to the previous close of ₹22445, down by 0.31 percent.

Crude, Prices, Market