Oil Prices Slide as Market Waits for Trump’s Davos Remarks and IEA Supply Outlook

Brent crude futures fell 1.8% to $79.45 per barrel, while WTI crude dropped 1.6% to $76.20, marking the first decline in three sessions. The move came ahead of high-profile events including Trump’s planned address at the annual Davos gathering, where economic policy and energy regulation may be central topics. Markets are closely monitoring whether his remarks signal renewed advocacy for expanded fossil fuel production or a shift toward climate-focused energy policies. The IEA’s upcoming snapshot is expected to provide updated insights into global oil inventories and demand trends. Analysts anticipate modest growth in global consumption, with forecasts pointing to a 1.3 million barrels per day increase in 2026—down from earlier projections of 1.5 million. Meanwhile, rising U.S. shale output is projected to add 550,000 barrels per day by mid-2026, contributing to oversupply concerns. Investors are also factoring in broader macroeconomic indicators, including inflation data from the U.S. and eurozone, which could influence central bank interest rate expectations. A stronger dollar, as reflected in the DXY index climbing to 105.3, has added downward pressure on commodity prices. Additionally, Asian refining margins have weakened, with heavy crude benchmarks slipping below $12 per barrel differential, signaling reduced near-term demand strength. Market participants remain cautious, with open interest in crude futures rising 8% week-over-week—a sign of increased hedging activity ahead of key announcements. Major energy firms such as ExxonMobil (XOM), Chevron (CVX), and TotalEnergies (TTE) saw slight declines in share value, with XOM down 0.9% and CVX off 1.2%.