Oil Prices Edge Higher on Jan 20, 2026 as Dollar Weakens and Markets Track Greenland Trade Tensions

Oil prices recorded marginal gains in early Asian trading, supported by a weaker US dollar and steady demand sentiment. 

However, market participants remained cautious as geopolitical developments resurfaced, particularly fresh trade tensions between the United States and European nations linked to negotiations over Greenland. 

Chinese economic data also provided limited support to crude prices.

Crude Oil Prices Rise in Early Trade

Crude oil benchmarks traded slightly higher on Tuesday morning. Brent futures advanced by around 0.2% to $64.09 per barrel, while US West Texas Intermediate contracts posted similar gains, with the February contract rising to $59.58 per barrel. 

The more actively traded March WTI contract also edged higher to $59.40 per barrel. Trading volumes were thinner as US markets were closed on Monday for a public holiday.

Weaker Dollar Lends Support

The softer US dollar contributed to modest strength in oil prices, as commodities priced in dollars typically benefit when the currency weakens. 

Despite a broader risk-off sentiment in global markets, crude prices remained relatively stable, reflecting cautious optimism among traders.

Trade Tensions Return to Focus

Market attention turned to renewed trade friction between the United States and Europe. Reports indicated that the US administration is considering additional tariffs on goods from several European nations if negotiations relating to Greenland do not progress. 

This development has raised concerns about potential disruptions to global trade flows, which could influence energy demand expectations.

Chinese Economic Data Offers Demand Support

Oil markets also drew some support from better-than-expected economic growth data from China. The world’s largest crude importer recorded annual growth of 5%, aligning with official targets. 

As per news reports, stronger external demand for Chinese goods helped offset weaker domestic consumption, offering a mild lift to global oil demand sentiment.

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Conclusion

Oil prices continue to navigate a balance between supportive macroeconomic indicators and renewed geopolitical risks. Currency movements, international trade developments, and economic data from key consuming nations are likely to remain central to short-term price direction.

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