Oil prices dipped in Asian trade, extending losses amid uncertainty over how US President Donald Trump's proposed tariffs and energy policies would impact global economic growth and energy demand.

 

Brent crude futures fell 38 cents, or 0.5 per cent, to $78.62 a barrel by 0716 GMT in a sixth straight day of losses, while US West Texas Intermediate crude (WTI) fell for a fifth day, easing 39 cents, or 0.5 per cent, to $75.05.

 

"Oil markets have given back some recent gains due to mixed drivers," said senior market analyst Priyanka Sachdeva at Phillip Nova. "Key factors include expectations of increased US production under President Trump's pro-drilling policies and easing geopolitical stress in Gaza, lifting fears of further escalation in supply disruption from key producing regions."

 

The broader economic implications of US tariffs could further dampen global oil demand growth, she added.

 

Trump has said he would add new tariffs to his sanctions threat against Russia if the country does not make a deal to end its war in Ukraine. He added these could be applied to "other participating countries" as well.

 

He also vowed to hit the European Union with tariffs, impose 25 per cent tariffs against Canada and Mexico, and said his administration was discussing a 10 per cent punitive duty on China because fentanyl is being sent to the US from there.

 

On Monday, he also declared a national energy emergency. That is intended to provide him with the authority to reduce environmental restrictions on energy infrastructure and projects and ease permitting for new transmission and pipeline infrastructure.

 

There will be "more potential downward choppy movement in the oil market in the near term due to the Trump administration's lack of clarity on trade tariffs policy and impending higher oil supplies from the US due to the...drive to make the US a major oil exporter", said OANDA's senior market analyst Kelvin Wong in an email.

 

On the US oil inventory front, crude stocks rose by 958,000 barrels in the week ended Jan. 17, according to sources citing American Petroleum Institute figures on Wednesday.

 

Gasoline inventories rose by 3.23 million barrels, and distillate stocks climbed by 1.88 million barrels, they said. -Reuters