Beirut: Oil prices edged lower on Thursday as uncertainty over Arctic geopolitics, renewed concerns about the independence of the US Federal Reserve (Fed), and signs that global supply continues to outpace demand weighed on market sentiment.
According to National News Agency - Lebanon, international benchmark Brent crude traded at $64.58 per barrel at 9.34 a.m. local time (0634 GMT), down around 0.2% from the previous close of $64.70. US benchmark West Texas Intermediate (WTI) was at $60.55 per barrel, down about 0.1% compared with $60.62 in the prior session.
US President Trump announced on Wednesday that a framework for a deal involving Greenland and the broader Arctic region was established following his meeting with NATO Secretary General Mark Rutte in Davos, Switzerland. Trump emphasized that this solution, once finalized, would benefit the United States and all NATO Nations, leading him to delay imposing tariffs that were scheduled to commence on February 1st.
Further negotiations are being conducted regarding the "Golden Dome," a proposed US missile defense system related to Greenland. Last week, Trump warned of a 10% tariff imposition on goods from several European countries starting February 1st, escalating to 25% by June unless a deal for the "complete and total purchase of Greenland" is reached.
The easing of trade tensions and the withdrawal of tariff threats initially buoyed oil prices by alleviating fears over global trade disputes. However, persistent geopolitical uncertainties in the Arctic region have tempered any significant price increases.
In addition, markets are evaluating Trump's comments on the Fed. He mentioned nearing the conclusion of his search for a replacement for Fed Chair Jerome Powell, suggesting a favored candidate was already in mind. Trump's ongoing criticism of Powell has led investors to anticipate a more growth-focused, low-interest-rate-friendly leadership at the Fed, which has in turn exerted pressure on the dollar, providing some support to oil prices. Nevertheless, concerns over the Fed's independence and medium-term economic uncertainty continue to restrict upward momentum.
On the fundamentals side, the International Energy Agency slightly increased its global oil demand growth forecast. The agency revised its outlook upward by 69,000 barrels per day (bpd), projecting that global oil demand will rise by about 932,000 bpd in 2026 to 104.98 million bpd, as per its January Oil Market Report.
Global oil supply, however, decreased by 350,000 bpd in December to 107.41 million bpd, marking a third consecutive monthly decline and leaving output about 1.6 million bpd below the record high reached in September 2025. Despite stronger demand expectations and declining supply suggesting a tighter global oil balance, analysts note that supply levels still surpassing demand have continued to limit price increases in the short term.