Threats of tariffs over the US desire to buy Greenland weakened the US dollar and supported oil prices
The US is threatening to impose tariffs on European countries over its interest in purchasing Greenland. Oil prices rose on Tuesday, supported by a weaker dollar, as markets followed Trump's threats of higher US tariffs on European countries over his interest in purchasing Greenland.
Brent futures rose 15 cents, or 0.2%, to $64.09 a barrel at 04:30 GMT. The February WTI crude oil contract, which expires on Tuesday, rose 14 cents, or 0.2%, to $59.58.
The more actively traded March WTI contract rose 6 cents, or 0.1%, to $59.40. WTI contracts did not trade on Monday due to the Martin Luther King Jr. Day holiday in the US.
A weaker US dollar has provided some support to oil and the broader commodities market, making dollar-denominated oil contracts cheaper for those holding other currencies.
Prices appeared relatively well-protected despite a broader risk-aversion movement in the markets. This came after renewed trade tensions between the US and Europe over Trump's Greenland demands.
Over the weekend, fears of a new trade war intensified after Trump said he would impose an additional 10% tariff on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the UK starting February 1, and that this rate would increase to 25% on June 1 if no deal is reached on Greenland.
China released better-than-expected fourth-quarter GDP data for 2025 and higher crude oil production. The oil market also found support from the better-than-expected fourth-quarter Chinese GDP data released on Monday. This resilience in the world’s largest oil importer has given a boost to demand sentiment.
China's economy grew 5.0% last year, the data showed, meeting the government's target by seizing a record share of global demand for goods to offset weak domestic consumption.This strategy has mitigated the impact of US tariffs, but its sustainability is becoming increasingly difficult.
Government data released Monday also showed that the country’s refining capacity is projected to increase 4.1% year-on-year by 2025, while crude oil production rose 1.5%, both at all-time highs.
Markets are also closely watching Venezuela’s oil sector after Trump said he would oust President Nicolas Maduro and that the US would control the industry.
According to various trading sources, Vitol offered Venezuelan oil for April delivery to Chinese buyers at a discount of about $5 per barrel compared to ICE Brent.
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