DTN Oil Update
WTI at $60 as Dollar Slides, Oil Risks Rise on Greenland
SECAUCUS, N.J. (DTN) -- Crude futures settled up Tuesday, Jan. 20, extending the rally of the past four weeks, as the dollar tumbled over President Donald Trump's decision to tariff European allies opposed to his plans to acquire Greenland.
Adding to the market's fervor was news that China's economy expanded by 5% last year amid a boom in refinery throughput in the world's largest oil importer.
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The U.S. Dollar Index was down almost 1% to a two-week low of 98.025 against a basket of foreign currencies, boosting prices of commodities priced in the greenback, including crude.
The yield on the U.S. 10-year bond hit a five-month high of 4.315, threatening to dramatically increase borrowing costs for businesses. While that should have driven crude prices lower, as it did in the stock market, oil was boosted instead by geopolitical risks tied to Trump's acquisition plan for Greenland.
The president threatened at the weekend a 10% tariff on eight European allies, warning it would grow to 25% unless they agreed to his plan. Trump has framed the acquisition of the Arctic island and semi-autonomous Danish territory as a non-negotiable requirement for U.S. security as he starts his second year in office.
Trump was expected to press on the agenda for Ukraine at this week's World Economic Forum in Davos, Switzerland, setting up potential rows with opposing European allies who have warned that the future of their decades-old NATO alliance was at risk.
"Trump has reignited a maximalist tariff crusade: new levies on eight NATO allies," Phil Davis, founder at PSW Investments, wrote, explaining the surge in geopolitical risks driving crude prices up this week after last week's turmoil in Iran, OPEC's fourth-largest exporter.
In China, data showed refinery throughput for oil climbed by 4.1% in 2025, while domestic crude production rose by 1.5% to reach historical peaks.
NYMEX WTI crude for February delivery settled up by $0.90, or 1.5%, at $60.34 bbl. The ICE Brent crude contract for March finished up by $0.98, or 1.5%, at $64.92 bbl.
The two crude benchmarks have risen by about 5% since the week ended Dec. 12.
Downstream, NYMEX ULSD futures for February delivery climbed by $0.0956 to $2.3332 gallon, while front-month RBOB moved up by $0.0331 to $1.8183 gallon.