By Enes Tunagur

LONDON (Reuters) – Oil prices fell on Tuesday as investors assessed U.S. President Donald Trump’s plans to apply new tariffs later than expected while boosting oil and gas production in the United States.

futures were down $1.42, or 1.77%, to $78.73 per barrel at 1116 GMT. U.S. West Texas Intermediate crude futures were down by $1.97, or 2.53%, at $75.91. There was no settlement in the U.S. market on Monday due to a public holiday.

Pressuring prices on Tuesday was a stronger U.S. dollar, as its strengthening makes oil more expensive for holders of other currencies.

“The current weakness is most probably Trump and dollar-related,” said PVM analyst Tamas Varga.

The dollar rebounded after Trump’s comments on imposing tariffs against Mexico and Canada, Varga added, noting that the dollar’s strength is negatively impacting oil prices.

Trump said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as previously promised.

“The initial sense of relief that trade measures weren’t an immediate focus on Trump’s ‘Day 1’ was quickly offset by reports of 25% tariffs on Mexico and Canada as early as February, which saw risk sentiments turn,” said Yeap Jun Rong, market strategist at IG.

Trump did not impose any sweeping new trade measures right after his inauguration on Monday, but told federal agencies to investigate unfair trade practices by other countries.

The U.S. president also said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.

Trump also promised to refill strategic reserves, a move that could be bullish for oil prices by boosting demand for oil.

Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea. Yemen’s Houthis on Monday said they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.

“Reopening of the Suez Canal will create a short-term abundance of supply given the shorter journey times, and that may also weigh on prices in the short term,” said Saxo Bank analyst Ole Hansen.

Investing.com– Oil prices slipped slightly lower Monday, as optimism over tighter supplies, amid stricter US sanctions against Russia, was offset by caution before President-elect Donald Trump’s inauguration. 

At 07:15 ET (12:15 GMT), expiring in March dropped 0.2% to $80.61 a barrel, while fell 0.1% to $77.31 a barrel.

Crude prices retreated slightly after recording four weeks of strong gains, as traders awaited news from Washington, with volumes limited by the US holiday.

Trump inauguration in focus for tariffs, energy cues 

Markets were now focused squarely on Trump’s inauguration later on Monday, with the President-elect having promised increased trade tariffs on top oil importer China.

Trump also reiterated plans to increase US energy production during a Sunday rally, promising to lift regulations on the domestic energy sector. 

Higher US production- which already stood close to record highs of over 13 million barrels per day in 2024- could potentially offset the impact of recent sanctions against Russia by keeping global crude supplies underpinned. 

Trump has also vowed to dole out expansionary policies during his term- a trend that could underpin demand in the world’s biggest oil importer. US oil demand was a mixed bag in recent months. While cold weather did spur increased demand for heating fuels, it disrupted travel across large swathes of the country during the travel-heavy year-end holidays. 

“There is a fair amount of uncertainty across markets coming into this week given the inauguration of President Trump and the raft of executive orders he reportedly is planning to sign. This combined with it being a US holiday today, means that some market participants may have decided to take some risk off the table,” analysts at ING said, in a note.

Oil markets weigh demand, supply outlook

Traders were speculating over a somewhat mixed outlook for oil supply and demand. While recent US sanctions on Russia could limit global supplies, this could be offset by demand remaining soft, especially if Trump imposes steep trade duties on China.

China is the world’s biggest oil importer, and has seen a steady decline in its appetite for crude amid persistent economic weakness. 

“Output data from China on Friday shows that refineries increased the amount of they processed by 1.3% year-on-year in December,” said ING. “However, for full-year 2024, refinery activity still fell by 3.6% YoY, reflecting weaker domestic demand. Output and trade numbers suggest that apparent oil demand in December came in at a little more than 13.9m b/d, down from 14m b/d the previous month, but up 0.6% YoY.”

The People’s Bank of China kept its benchmark loan prime rate unchanged, as widely expected, on Monday. 

Beijing is expected to ramp up its stimulus measures in the face of trade headwinds under Trump. Recent data also showed China’s economy improved after Beijing doled out its most aggressive round of stimulus measures in late-2024. 

Recent gains in oil have also been curtailed by easing tensions in the Middle East, as Hamas and Israel exchanged hostages and prisoners over the weekend under a recently signed ceasefire, which also saw traders attach a smaller risk premium to oil.

(Ambar Warrick contributed to this article.)

By Arunima Kumar

(Reuters) -Oil prices were steady on Monday as traders awaited U.S. President-elect Donald Trump’s inauguration in the hope of some clarity on his policy agenda, including plans to end the Russia-Ukraine war.

futures dropped 37 cents, or 0.46%, to $80.42 a barrel by 1004 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 24 cents, or 0.31%, at $77.64.

The more active U.S. WTI crude March contract fell 36 cents to $77.03.

The focus is what executive orders Donald Trump will sign over the next 24 hours, said UBS analyst Giovanni Staunovo.

Charalampos Pissouros at broker XM, meanwhile, said that oil prices were trading a little lower on expectations that Trump will relax energy-related sanctions against Russia in exchange for an end to the war in Ukraine

Trump, who will be inaugurated later on Monday, is widely expected to make a flurry of policy announcements in the first hours of his second term, including an end to a moratorium on U.S. liquefied (LNG) export licences as part of a wider strategy to strengthen the economy.

The Brent and WTI benchmarks advanced more than 1% last week for a fourth consecutive weekly gain after the Biden administration sanctioned more than 100 tankers and two Russian oil producers.

That led to a scramble by top buyers China and India for prompt oil cargoes and a rush for ship supply as dealers of Russian and Iranian oil sought unsanctioned tankers for oil shipment.

While the new sanctions could cut supply from Russia by nearly 1 million barrels per day (bpd), recent price gains could be short lived depending on Trump’s actions, ANZ analysts said in a client note.

Trump has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord, they said.

Easing tension in the Middle East also kept a lid on oil prices. Hamas and Israel exchanged hostages and prisoners on Sunday that marked the first day of a ceasefire after 15 months of war.