Oil Steady as Trump Rules out Use of Force Over Greenland


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures steadied Wednesday (1/21), moving away 
from recent highs, after U.S. President Donald Trump ruled out the use of force 
to acquire Greenland.

   The International Energy Agency's (IEA) forecast of a 4.25 million bpd 
global surplus for the first quarter also weighed on the market.

   Offsetting some of the bearish sentiment was news out of Kazakhstan, where 
the operator of the Tengiz oilfield, TCO, declared force majeure on crude oil 
deliveries into the CPC pipeline system. Technical disruptions and fires at 
major fields Kazakhstan's production have cut Kazakh output to around 1.5 
million bpd, from a regular 1.8 million to 1.9 million.

   The U.S. Dollar Index hit to a session low of 98.18 against a basket of 
other currencies, not far from Tuesday's (1/20) four-week low of 98.025 -- the 
largest one-day drop since the summer of 2025.  A weaker dollar typically 
boosts commodities denominated in the greenback.

   "Greenland was the headline risk," Stephen Innes of SPI Asset Management 
wrote as U.S. President Donald Trump arrived at the World Economic Forum in 
Davos, Switzerland to push ahead with the U.S. campaign to acquire Greenland -- 
a bid which both the semi-autonomous Danish territory and the broader European 
community have rejected.

   In a departure from his hostile language of recent days, Trump, however, 
told the Davos gathering that the U.S.  will not use force to acquire Greenland.

   The Paris-based IEA raised its world supply growth forecast by 100,000 bpd 
from December's report to 2.5 million bpd. The energy watchdog also revised 
higher the demand growth forecast for 2026 by 70,000 bpd to 930,000 bpd on the 
back of normalizing economic conditions. These latest estimates imply a global 
oil surplus of 3.69 million bpd in 2026.

   Market participants are also focused on U.S. oil inventory data for last 
week -- due at 4:30 p.m. ET today from the American Petroleum Institute, and on 
Thursday from the U.S. Energy Information Administration.

   NYMEX WTI crude for February delivery slipped by $0.04, or 0.1%, to $60.32 
bbl. The ICE Brent crude contract for March dipped by $0.07, or 1%, to $64.85 
bbl.

   Prior to the pullback, the two crude benchmarks had risen for four 
consecutive weeks.

   Downstream, NYMEX ULSD futures for February delivery climbed by $0.0645 to 
$2.403 gallon, while front-month RBOB moved up by $0.0169 to $1.8407 gallon.




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