
Week in Review: Trump Calls for Lower Oil Prices as Refinery Utilization Hits Multi-Month Lows
Oil prices rose slightly on Friday but remained on track for a weekly decline, as U.S. President Donald Trump announced plans to increase domestic production and called on OPEC to lower crude prices. This morning, U.S. West Texas Intermediate (WTI) crude increased 0.3% to $74/bbl. For the week, WTI dropped around 4%.
Market sentiment has been impacted by Trump’s energy policies, including a declaration of a national energy emergency to boost U.S. oil and gas production and plans to roll back environmental restrictions. Additionally, potential tariffs on the EU, Canada, Mexico, and China have raised concerns about global economic growth and oil demand. While oil prices are expected to range between $75 and $78 per barrel in 2025, the market remains cautious due to uncertainties surrounding sanctions, tariffs, and global supply-demand fundamentals.
At the World Economic Forum in Davos, President Trump announced plans to request Saudi Arabia and OPEC+ to reduce oil prices, a call reminiscent of his previous presidency when he urged OPEC+ to address high prices and negotiated output cuts during the COVID-19 pandemic. However, OPEC+ has not responded to Trump’s recent remarks, instead pointing to their existing plan to increase oil output in April 2025, which has been delayed several times due to weak demand.
Saudi Arabia’s Economy Minister reaffirmed OPEC’s focus on long-term market stability rather than targeting specific prices. Trump also suggested that lowering oil prices could end the Russia-Ukraine war, but the Kremlin dismissed this claim, emphasizing national security over oil concerns. OPEC+ is scheduled to review its policy at a Joint Ministerial Monitoring Committee meeting on February 3, with a decision on the planned April output increase expected by early March.
The latest EIA report highlights a heavy drop in U.S. refinery utilization rates to 85.9%, down from 91.6% the previous week, indicating winter maintenance is underway. The Gulf Coast saw the largest decline, with utilization falling 8.7% and crude processing down by 868,000 bpd. West Coast utilization also fell sharply, with rates dropping to 81.5% due to ongoing maintenance and flaring activities, which are expected to continue through early February.
Despite reduced refinery runs, gasoline production remained relatively stable, while diesel and jet fuel output declined more significantly. Nationwide diesel stocks fell by 3.1 million barrels despite increased demand. In contrast, gasoline stocks showed mixed regional changes, with builds in the Gulf Coast but declines on the East Coast due to a temporary Colonial Pipeline shutdown last week.
U.S. crude inventories have fallen for nine consecutive weeks, reaching their lowest level since March 2022. Crude oil inventories fell by 1 million barrels nationally, though the West Coast saw a slight increase of 194,000 barrels. Crude imports rose, driven by higher Canadian shipments, while exports climbed to over 4.5 million bpd. Weather-related disruptions and planned maintenance activities are causing temporary adjustments in output and inventory levels.
Prices in Review
Crude oil opened the week at its highest at $78.19. However, crude saw declines throughout the week and opened at $74.30 this morning, accounting for an almost $4 weekly decline or 4.97%.
Diesel opened on Tuesday at $2.6345, its highest point for the week. Diesel also saw declines throughout the week, with its sharpest drop on Wednesday. This morning, diesel opened at $2.4661, an overall decline of 16 cents or 6.39%.
Gasoline opened the week at $2.1152 and experienced declines for the rest of the week. This morning, gasoline opened at $2.0558, an overall decline of 5 cents or 2.8%.
This article is part of Daily Market News & Insights
Tagged: Week in Review
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