Oil Prices Take a Nap After Trump’s New Energy Orders
Oil stocks fell about 1% on Thursday—the fourth straight day of decline—after hitting a peak in the past three‑month cycle. Washington’s newest commander‑in‑chief, Donald Trump, signed a bundle of executive orders on his first day in office that are primed to flood the market with extra crude.
What Trump’s Frontier Comes with
- He pulls the U.S. out of the Paris Climate Accord—no more global warming mandates.
- He declares a national energy emergency that temporarily suspends a slew of environmental regulations.
- He revokes or pauses policies aimed at curbing fossil‑fuel use, meaning oil companies can tap into production more freely.
All of this means the U.S. could supply another splash of oil to a market already struggling with a surplus, prompting some analysts to see a price drop as a “boost to inflation suppression.”
Trade Talk: Trump’s Mixed Signals with China
While oil is getting the boot, trade negotiations are juggling like a circus. Trump delayed heavy tariffs on China—contradicting campaign bravado—while hinting at a visit to Beijing to sweeten ties with President Xi. Xi sent a vice president instead of an ambassador to his inauguration, a gesture that suggests “ok, we’re cool.”
Trump told reporters: “We’re not ready for that yet.” That feels like a polite “maybe later” after a “yes” rally. Analysts say the pause might keep the market on its toes while the administration canvasses for the next trade deal.
Possible Consequences for the Global Economy
- Inflation estimates for 2026 go up a smidge—from 2.3% to 2.6%.
- GDP growth could be dented by 0.2 percentage points if rattle becomes a full‑blown trade war.
- Without aggressive tariffs, the risk of a “trade war” arms race could dial down.
In simpler terms: if Trump balances diplomacy with a bit of heavy‑handedness, the energy market may sigh in relief and the global economy may get a breather. If he goes blunt, prices could keep the “risk premium” high, or if Russian sanctions ease, we might see oil from the East rain back in.
As Karen Tumulty of The Washington Post reminds us, watch Trump’s actions, not his words—that’s the real trick to beating the unpredictable rollercoaster.
