What’s happening: Crude prices settled lower on Thursday, after US President Donald Trump announced plans to slash oil prices.
What happened: Trump urged the OPEC (Organization of the Petroleum Exporting Countries) and Saudi Arabia to cut oil prices.
The US president also announced plans to impose import tariffs on China, which raised concerns over oil demand from the world’s biggest crude importer.
Why it matters: Oil prices had surged into the new year, with outgoing President Joe Biden imposing wider sanctions against Russia.
Oil prices have declined by more than 3% this week, after Trump entered the White House on Monday and made statements around increasing US crude output, which already reached a record high last year.
In a remote appearance at the World Economic Forum in Davos, Switzerland on Thursday, Donald Trump urged Saudi Arabia and OPEC to lower the cost of crude oil, saying that this would bring the Russia-Ukraine war to an end.
Investors also monitored the latest report from the US Energy Information Administration (EIA), which showed that commercial crude inventories had declined for a ninth straight week, while gasoline stockpiles rose. The EIA issued its report a day late due to a US holiday on Monday.
Domestic commercial crude supplies contracted by 1 million barrels to 411.7 million barrels in the week ended January 17, much less than the expectations of a decline of 2 million barrels.
WTI crude for March delivery declined 82 cents, or 1.1%, to close at $74.62 per barrel on the NYMEX (New York Mercantile Exchange) on Thursday, while March Brent crude fell 71 cents, or 0.9%, to settle at $78.29 per barrel on ICE Futures Europe.
Both standards of crude oil closed the session at their weakest levels since January 9.
In other energy trading, February gasoline gained 0.4% to $2.07 a gallon, while February heating oil declined 0.5% to $2.47 a gallon and natural gas for February delivery fell 0.4% to close at $3.95 per million British thermal units.
What to watch: Investors await the release of data on Baker Hughes crude oil rigs (2200 UAE Time) from the US today. Crude oil rigs in the US fell to 478 in the January 17 week from 480 in the previous week, the lowest level since late-November 2024.
Context: The CAD/USD forex pair rose on Friday amid weakness in the US dollar.
Details: Data released on Thursday showed Canada’s retail sales growing by 1.6% in December, recording the biggest increase since May 2022. The country’s retail sales had come in flat for November. Year-on-year, Canada’s retail sales grew by 1.6% in December.
Weakness in the US dollar lent support to the CAD/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 107.84 on Friday.
However, a decline in the price of crude oil, one of Canada’s major exports, weighed on the loonie. WTI crude oil prices slipped around 0.1% to $74.58 per barrel this morning.
The CAD/USD gained around 0.4% to reach 1.4324 this morning. The S&P/TSX Composite Index rose 0.48% to close at 25,434.08 on Thursday, extending gains for the eighth straight session, driven by a surge in financial and railway shares.
What to watch: Investors await the release of data on Canada’s CFIB business barometer (1600 UAE Time), new housing price index (1730 UAE Time) and manufacturing Sales (1730 UAE Time). The CFIB’s Business Barometer in Canada, which declined to 56.4 in December, is expected to slip further to 56.2 in January.
Analysts expect new home prices in Canada to increase by 0.2% in December, following a 0.1% rise in November, while manufacturing sales are projected to grow by 0.3% in December.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.92%, 0.53% and 0.22%, respectively.
Arms and military equipment worth $8.48 billion are on their way to Ukraine to help in its war with Russia, German news agency Deutsche Presse Agentur reported. The news sent the RUB/USD pair lower in forex trading this morning.
Philippines’ trade deficit shrank to $4.1 billion in December, from $4.2 billion in the year-ago month, lending support to the PHP/USD forex pair.
Singapore’s private home prices climbed by 2.3% in the fourth quarter, in-line with expectations. Home prices recovering from a 0.7% decline in the previous quarter sent the SGD/USD pair higher in forex trading this morning.
Japan’s au Jibun Bank manufacturing PMI fell to 48.8 in January, from 49.6 in the previous month, exerting pressure on the JPY/USD forex pair.
Australia’s S&P Global flash PMI Composite Output Index edged higher to 50.3 in January, from 50.2 in the previous month. The country’s private sector activity expanding for the fourth straight month sent the AUD/USD pair higher in forex trading this morning.
Spain’s PPI (1200 UAE Time), France’s HCOB manufacturing PMI (1215 UAE Time), HCOB services PMI (1215 UAE Time) and HCOB composite PMI (1215 UAE Time), Germany’s HCOB manufacturing PMI (1230 UAE Time), HCOB composite PMI (1230 UAE Time) and HCOB services PMI (1230 UAE Time), Eurozone’s HCOB composite PMI (1300 UAE Time), HCOB manufacturing PMI (1300 UAE Time) and HCOB services PMI (1300 UAE Time), UK’s S&P Global manufacturing PMI (1330 UAE Time), S&P Global services PMI (1330 UAE Time), S&P Global composite PMI (1330 UAE Time) and CBI distributive trades (1500 UAE Time), Brazil’s FGV consumer confidence (1500 UAE Time) and IPCA mid-month CPI (1600 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Mexico’s economic activity (1600 UAE Time), as well as US S&P Global composite PMI (1845 UAE Time), S&P Global manufacturing PMI (1845 UAE Time), S&P Global services PMI (1845 UAE Time), existing home sales (1900 UAE Time) and University of Michigan consumer sentiment (1900 UAE Time).