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What’s happening: Oil futures finished higher for a third straight session on Tuesday.
What happened: Both WTI and Brent climbed to their highest settlement in two weeks, after having declined last week to their lowest so far in 2025.
Crude prices rose even as the US Energy Information Administration (EIA) raised its forecast for US oil production.
Why it matters: The EIA said in its Short-Term Energy Outlook report released on Tuesday that US oil production could set a bigger record this year than was previous anticipated. Increasing oil production to make the US energy independence has been one of President Donald Trump’s prime agendas in his second term.
The EIA now expects US crude oil production to average 13.59 million barrels per day (bpd) in 2025, versus its previous estimate of 13.55 million bpd.
Despite this, oil prices climbed on Tuesday on concerns around oil supplies from Iran and Russia. Reports showed a further decline in Russian oil production in January. Russia has been producing lower that its OPEC+ quota due to sanctions and export restrictions.
Escalating tensions in the Middle East as well as new US sanctions on tankers transporting Iranian crude to China also raised supply concerns.
Trump’s recent steel tariffs have also come as a surprise amid his “Drill, Baby Drill” slogan. This is because the domestic shortage of specialty steel could disrupt the US energy sector.
Weakness in the US dollar also supported oil prices, as a lower greenback makes commodities cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, lost around 0.4% to 107.91 on Tuesday.
WTI crude for March delivery rose 1.18% to settle at $73.17 a barrel on the NYMEX (New York Mercantile Exchange). March Brent crude climbed 1.29% to $76.85 a barrel on ICE Futures Europe.
The EIA report also stated that US natural gas output and demand are both likely to reach record highs in 2025.
Natural gas for March delivery rose 2.0% to $3.513 per million British thermal units.
What to watch: Investors will monitor the EIA’s report on US crude stockpiles today (1900 UAE Time). US crude inventories rose by 8.664 million barrels in the week ended January 31, significantly higher than market expectations of a build of 2.6 million barrels.
Context: A Bloomberg Intelligence report showed that gold is poised to gain momentum against both tech stocks and bitcoin.
Details: Bloomberg’s senior commodity strategist, Mike McGlone, said on Tuesday that the latest Bloomberg Intelligence report that gold seems to be poised to outperform “the AI-driven S&P 500 on a one- two- and three-year basis.”
McGlone highlighted that the VIX (the Chicago Board Options Exchange Volatility Index) is declining, indicating easing stock market volatility. Meanwhile, bitcoin has been struggling to reach its peak of $107,148 reached on December 16 last year.
Gold, on the other hand, has enjoyed an impressive run towards $3,000 per ounce, gaining more than 10% year to date. Gold prices have climbed more than 48% over the past year. US President Donald Trump’s escalating tariff threats and fears of a trade war have resulted in gold continuing to shine as investors seek safe-haven assets.
The yellow metal seems to be “testing the limits of the great U.S. wealth-creation machine,” McGlone said. While gold may outperform both bitcoin and S&P 500, it does not suggest these assets would decline. Bitcoin may be supported by Trump’s endorsement, he added.
Meanwhile, Japan’s Financial Services Agency (FSA) is looking to ease restrictions on cryptocurrency investments, including lowering the tax rate and lifting the ban on crypto ETFs.
Gold futures declined by 0.66% to close at $2,913.10 on Tuesday. The yellow metal is up 7% over the past month.
Meanwhile, bitcoin declined by 0.43% to $95,449.69 this morning. The crypto king has gained 2% over the past month.
What to watch: Investors await the release of US inflation rate (1730 UAE Time) today. The annual inflation rate in the US had accelerated from 2.7% in November to 2.9% in December. The rate is widely expected to hold steady at 2.9% in January.
Other Markets: US trading indices closed mixed on Tuesday, with the Dow Jones index and S&P 500 up by 0.28% and 0.03%, respectively, and the Nasdaq 100 down by 0.36%.
The South Korean news agency Yonhap said North Korea has sent around 200 long-range artillery guns to Russia for its war with Ukraine. The news sent the RUB/USD pair higher in forex trading this morning.
Australia’s total value of home loans for owner-occupiers climbed by 4.2% to A$54.8 billion in the fourth quarter, following a 3.5% rise in the previous quarter, lending support to the AUD/USD forex pair.
Canada’s total value of building permits jumped by 11.0% to $13.1 billion in December, compared to a 5.6% decline in November. However, the CAD/USD pair fell slightly in forex trading this morning.
Mexico’s industrial output contracted by 2.7% year-over-year in December, after a 1.4% decline in the previous month. The region’s industrial activity declining for the fifth straight month exerted pressure on the MXN/USD forex pair.
Indonesia’s retail sales grew by 1.8% year-on-year in December, accelerating from the 11-month low of 0.9% in November. This being the fastest pace of retail growth since September sent the IDR/USD pair higher in forex trading this morning.
Italy’s industrial production (1300 UAE Time), India’s industrial production (1430 UAE Time), inflation rate (1430 UAE Time) and manufacturing production (1430 UAE Time), US MBA mortgage applications (1600 UAE Time), inflation rate (1730 UAE Time), Fed Chair Powell testimony (1900 UAE Time), EIA crude oil stocks change (1930 UAE Time), EIA gasoline stocks change (1930 UAE Time), EIA distillate stocks change (1930 UAE Time), EIA heating oil stocks change (1930 UAE Time) and monthly budget statement (2300 UAE Time), Germany’s current account (1745 UAE Time), as well as Bank of Canada’s summary of deliberations (2230 UAE Time).
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