(RTTNews) – Crude oil fell on Friday after three days of sharp gains as traders opted to book profits. Additionally, a higher US dollar index and the possibility of diplomatic intervention in the US-Iran conflict weighed on prices.
WTI crude oil for March delivery was last seen trading at $65.20 per barrel, down $0.22 (or 0.34%).
The US government faces the threat of a partial shutdown, with a government funding deadline set to expire at midnight tonight.
An agreement between Democrats and Republicans and the White House to pass the bills (which now stops funding the Department of Homeland Security) has fallen apart after a planned Senate vote on the deal stalled.
Even if it is approved in the Senate, the plan needs to return to the House of Representatives, which is in recess until the weekend.
Meanwhile, Trump announced the nomination of former US Federal Reserve Governor Kevin Warsh as the successor to current Chairman Jerome Powell, whose term ends in a few months.
As Warsh is known as a supporter of higher interest rates, this choice surprised analysts, as Trump has been advocating lower rates.
The US Dollar Index was last seen trading at 96.75, up 0.47 (+0.49%).
Yesterday, the Trump administration lifted some restrictions on Venezuela’s oil industry to make it easier for US companies to sell its crude and announced that more restrictions would be eased in the coming days.
Earlier this month, US forces stormed the fortress of Venezuelan President Nicolas Maduro, captured him and took him to the US, where he currently faces a criminal investigation.
The new leadership in Venezuela amended its hydrocarbon policy to grant private companies greater control over the production and sale of its rich oil reserves, largely benefiting the US.
In the Middle East, despite Trump warning of serious attacks on Iran if it refuses to negotiate over its nuclear programs, Iran has stuck to its guns, refusing to bow to US pressure.
Iran’s plan to conduct “live-fire drills” in and around the Strait of Hormuz, a key chokepoint for oil transit, has left commercial ships as well as traders worried about supply disruptions.
Iran has an armada of the American naval fleet.
Türkiye has offered to mediate between America and Iran.
On Wednesday, the US Energy Information Administration highlighted that US commercial crude oil inventories decreased by 2.3 million barrels for the week ending January 23. This does not include stacks in the Strategic Petroleum Reserve.
Last year, China increased its crude oil imports to an annual all-time high, about 11.55 million barrels per day.
Although China does not report its inventory data, for December 2025, China’s number was reported at 2.67 million barrels per day, compared with 1.88 million bpd in November.
At Trump’s request, Russia agreed to “cease” attacks on Ukraine by February 1. Despite the US urging Russia and Ukraine to compromise on the Trump-proposed peace plan, “regional concessions” remain a sticking point with both countries sticking to their demands.
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