Investing.com — Oil prices stabilized in Asian trading on Wednesday, after recording some losses this week after US President Donald Trump declared a national emergency to increase energy production.
But crude has seen a strong rise in recent weeks, as tough US sanctions on the Russian oil industry remain a possibility of tight supplies in the near term. Oil shipping rates also rose sharply with the move, heralding tightening markets.
Trump remained a major focus for markets, with the president also raising the possibility of increasing trade tariffs against major economies, especially major oil producer Canada and top importer China.
Futures contracts expiring in March fell slightly to $79.24 per barrel, while falling 0.2% to $75.69 per barrel by 20:34 ET (01:34 GMT).
Traders are now looking to upcoming US inventory data for further signs on supply.
Trump declares a national emergency to boost production
Trump declared a national emergency on Monday to dramatically increase US energy production — one of his first steps after taking office.
The president signed an executive order outlining the move, which allowed more production from domestic producers and also scaled back climate change policies imposed by the outgoing Biden administration. Trump also said the United States would withdraw from the Paris Climate Accords.
While Trump did not specify just how much oil production would increase, analysts said the move was unlikely to spur any increases in supply in the near term.
Traders were also cautious about Trump's trade policies, after the president raised the prospect of 10% tariffs on China and 25% on Canada and Mexico.
China was the biggest concern for oil markets, given that more economic pressure on the country could reduce its appetite for crude oil.
Russian sanctions and cold weather support oil
The latest US sanctions against the Russian oil industry – the most aggressive to date – are expected to tighten oil markets in the near term, especially since the US has issued restrictions on Russia's oil tanker fleet.
This severely limits Moscow's ability to distribute crude oil, and could send buyers in Asia scrambling to find new sources of oil, or paying higher shipping costs to bring in Russian crude.
Cold weather in the United States and Europe is also expected to increase demand for crude oil, while disrupting crude oil production in parts of the United States.
But the cold weather is also expected to disrupt travel in both regions.
