On Tuesday, oil prices increased as a result of China’s better-than-anticipated economic growth, raising market expectations for demand. Traders are also waiting to see how President Donald Trump’s promises to increase U.S. tariffs on European countries, due to Trump’s interest in acquiring Greenland, will affect prices.
At 0100 GMT, Brent was trading at $64.13, an increase of 19 cents (0.30 percent). The West Texas Intermediate (WTI) contract for February was priced at $59.69, representing an increase of $0.25 (0.40 percent) from its close on Friday.
In addition, the more actively traded WTI March contract was $59.42, an increase of $0.08 (0.13 percent). Because of the Martin Luther King Jr. holiday on Monday, trading in WTI contracts did not occur. According to IG’s market analyst, Tony Sycamore, “WTI crude oil prices are modestly higher today,” and “the world’s largest importer of oil has provided support for demand.”
According to data released on Monday, China’s economy expanded by 5.0% last year due in part to its increasing share of the global demand for goods, which offset weak domestic demand and helped to limit the negative impact of US tariffs. However, this approach is becoming more difficult to maintain as global trade continues to change.
Government data released later that same day noted that refinery throughput increased by 4.1% compared to the previous year, and crude oil production increased by 1.5%, both hitting record levels in 2025.
As well, over this past weekend, there is the possibility of another trade war was becoming imminent as President Trump announced plans to impose 10% tariffs effective February 1st on products imported into the US from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain, which would increase to 25% on June 1st (if an agreement on Greenland had not been reached).
Adding to the upside, US dollar weakness related to the uncertainty surrounding the Greenland trade deal led to market participants selling USD, which led to market support of crude oil prices. The US dollar (relative to other currencies) was down approximately -0.3% on the day, and, therefore, this situation will lead to cheaper dollars for holders of currencies other than the USD on dollar-based crude oil contracts.
Following remarks from President Trump about how the U.S. would take control of the Venezuelan oil industry when Maduro is captured, many market participants have been paying particular attention to what is happening with that country’s oil sector.
According to multiple trade sources, Vitol recently offered discounted Venezuelan oil ($5/barrel off ICE Brent) to customers in China for April shipment (2023). Moreover, according to industry sources and shipment records, China is sourcing more Urals crude oil from Russia than any other country except India, which has significantly reduced its imports of Russian crude oil due to the imposition of sanctions by the West, and before the start of an EU trade embargo on finished oil products derived from Russian crude oil.
