21 Jan 2025

• WTI price trades in negative territory near $76.15 in Tuesday's early Asian session. 
• US President Donald Trump promised to boost US crude production, weighing on the WTI price. 
• The upbeat Chinese economic data could cap the downside for the black gold. 
• West Texas Intermediate (WTI), the primary benchmark for crude oil prices in the United States, is currently trading at approximately $76.15 as of Tuesday. This price point has attracted significant attention from sellers in the market, particularly as participants brace for a series of executive orders anticipated from US President Donald Trump following his recent inauguration.
• On Monday, President Trump made headlines by announcing his intention to declare a national energy emergency. He emphasized his commitment to replenishing the nation’s strategic reserves and leveraging his executive authority to accelerate the approval processes for new oil, gas, and electricity projects. These projects often face lengthy permitting procedures, which can delay development and production.
• The Trump administration is poised to advocate for a substantial increase in both oil and gas production and consumption within the United States. This push for domestic energy expansion could potentially exert downward pressure on WTI prices, as increased supply may outpace demand. In his announcement, Trump highlighted the connection between the current inflation crisis in the US and rising energy costs, attributing the economic challenges to "excessive spending." He declared, "We will drill, baby, drill. America will reclaim its status as a manufacturing powerhouse," signaling a robust commitment to revitalizing the energy sector.
• However, the potential for WTI prices to experience significant upward movement may be constrained by a recent reduction in geopolitical tensions in the Middle East. Notably, a recent development saw Hamas and Israel engage in a swap of hostages and inmates, marking the beginning of a truce after 15 months of ongoing conflict. This easing of tensions could lead to a more stable oil supply from the region, further influencing WTI price dynamics.
• On the other hand, positive economic indicators emerging from China could provide a counterbalance to the downward pressure on WTI prices. As the world's largest importer of oil, China's economic performance is closely watched by market participants. The Chinese economy reported a year-on-year growth of 5.4% in the fourth quarter of 2024, surpassing the 4.6% growth recorded in the previous quarter and exceeding analysts' expectations of 5%. This robust growth could bolster demand for crude oil, potentially supporting WTI prices in the face of increased domestic production in the US.
• In summary, while the Trump administration's push for increased energy production may create downward pressure on WTI prices, the combination of reduced geopolitical tensions in the Middle East and positive economic growth in China could play a significant role in shaping the future trajectory of crude oil prices. Market participants will be closely monitoring these developments as they navigate the