DTN Oil Update
Oil Rally Thins as Greenland Tensions Ease
SECAUCUS, N.J. (DTN) -- The rally in crude futures softened Wednesday, Jan. 21, after U.S. President Donald Trump ruled out the use of force to acquire Greenland.
The easing of tensions over the autonomous Danish territory led the dollar higher from the prior session's one-month low, while the yield on U.S. Treasuries' 10-year bonds tumbled from five-month peaks.
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Despite those bearish moves for commodities, oil bulls managed to retain the market's positive momentum after the International Energy Agency (IEA) revised down its glut forecast for 2026.
Also aiding sentiment was a force majeure on crude deliveries declared by the operator of the Tengiz oilfield in Kazakhstan. A combination of outages and fires at major fields in Kazakhstan have cut output to around 1.5 million bpd, from a regular 1.8 million to 1.9 million.
U.S. President Donald Trump told the World Economic Forum in Davos, Switzerland, that he would not resort to military action to acquire Greenland, resulting in relief for Europe and global markets. Trump, however, said the U.S. will not give up its pursuit of owning Greenland and has formed "the framework of a future deal" in line with its aim.
The Paris-based IEA implied that the global oil surplus will stand at nearly 3.7 million bpd this year versus its previous forecast of 3.6 million, after raising its demand outlook by about 100,000 bpd.
Market participants were also focused on U.S. oil inventory data for last week, due after market hours today from the American Petroleum Institute. The U.S. Energy Information Administration will release its own reading on Thursday for oil balances from last week.
NYMEX WTI crude for February delivery settled up $0.26, or 0.4%, at $60.62 bbl. The ICE Brent crude contract for March finished up $0.32, or 0.5%, at $65.24 bbl. It was the smallest percentage advance in a day for oil since a run-up that began on Friday.
Among refined products, NYMEX ULSD futures for February delivery climbed by $0.084 to $2.4225 gallon, while front-month RBOB moved up by $0.0320 to $1.8558 gallon.
The U.S. Dollar Index rose 0.2% to 98.8 against a basket of currencies.