The oil price is dropping on the plan to increase US oil production, and the tariffs are being re-instated

Oil prices fell in Asian trading Tuesday, after President Donald Trump announced his plan to increase U.S. production of oil and natural gas and delayed the application of new tariffs.

Brent crude futures fell 11 cents or 0.14% to $80.04 a barrel at 0156 GMT.

The West Texas Intermediate crude contract for March, the most active one on the market, fell 67 cents from Friday's closing price to $76.72 per barrel. Due to a holiday, there was no settlement on the U.S. oil market for January 20. The contract for February expires Tuesday.

Donald Trump announced plans to increase U.S. production of oil and natural gas. He said that he would consider imposing tariffs of 25% on imports coming from Canada and Mexico starting February 1, rather than immediately. This helped lower oil prices.

Tariffs on Canadian crude oil could eventually drive the market up.

Most of Canada's exports are sold at a lower price than WTI. Vivek Dhar, Commonwealth Bank analyst, said that the sanctions imposed by the United States could lead to higher prices for Canada's most important oil exports.

Trump laid out an ambitious plan to speed up oil, gas, and power permits in order to maximize the already high U.S. production of energy.

He did not immediately impose new trade measures, but he instructed federal agencies to look into unfair trade practices of other countries.

Trump said that the U.S. will "probably" cease buying oil from Venezuela. The U.S. is second in line after China as a buyer of Venezuelan crude oil.

He also promised to replenish strategic reserves. This could boost demand for U.S. oil by increasing the price. (Reporting and editing by Jamie Freed, Sonali Paul and Colleen Waye)

(source: Reuters)