Oil Extends Drop With Focus on Rising Stockpiles, Trump Actions

Oil prices continued their downward trend on Friday, with traders focusing on rising stockpiles and potential actions by the Trump administration. The Brent crude futures contract for March delivery fell $1.17, or 1.9%, to settle at $61.20 a barrel on the New York Mercantile Exchange. The U.S. West Texas Intermediate crude futures contract for March delivery fell $1.23, or 2.2%, to settle at $54.13 a barrel.



The decline in oil prices comes as traders focus on rising stockpiles and potential actions by the Trump administration. The Energy Information Administration (EIA) reported on Wednesday that U.S. crude oil inventories rose by 8.6 million barrels in the week ended Feb. 14, more than double the expected increase of 3.9 million barrels. The EIA also reported that gasoline inventories rose by 2.3 million barrels, while distillate stockpiles fell by 1.1 million barrels.

The rise in stockpiles has led some traders to believe that the market is oversupplied, which could put downward pressure on prices. Additionally, traders are keeping an eye on potential actions by the Trump administration, which has been critical of OPEC's production cuts and has threatened to take action against countries that do not increase production.

"I think the market is focused on the potential for increased production from OPEC and the potential for the Trump administration to take action against countries that do not increase production," said John Kilduff, a partner at Again Capital LLC in New York. "The rise in stockpiles is also a concern, as it suggests that the market is oversupplied."



The decline in oil prices comes despite a weaker U.S. dollar, which typically supports commodities priced in dollars. The dollar index fell 0.2% to 96.14, its lowest level since Jan. 24. A weaker dollar makes commodities cheaper for holders of other currencies, which can increase demand and support prices.

The decline in oil prices also comes as the Trump administration considers taking action against countries that do not increase production. On Thursday, the U.S. State Department said it was considering sanctions against Venezuela's state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA), in response to the country's continued support for the Maduro regime.

"I think the market is focused on the potential for increased production from OPEC and the potential for the Trump administration to take action against countries that do not increase production," said Kilduff. "The rise in stockpiles is also a concern, as it suggests that the market is oversupplied."

In conclusion, oil prices extended their decline on Friday, with traders focusing on rising stockpiles and potential actions by the Trump administration. The decline in prices comes despite a weaker U.S. dollar, which typically supports commodities priced in dollars. The Trump administration's consideration of sanctions against Venezuela's state-owned oil company also contributed to the decline in prices. Traders will continue to watch for developments in OPEC's production cuts and potential actions by the Trump administration, as well as changes in stockpiles, to gauge the direction of oil prices in the coming weeks.