Oil prices fell by about 1.5% early on Thursday as U.S. President Donald Trump walked back on his threat to slap tariffs on NATO allies for supporting Greenland’s sovereignty.

As of 7:42 a.m. ET on Thursday, the U.S. benchmark WTI Crude had dropped below the $60 per barrel mark, which it hit early this week amid intensified rhetoric regarding the U.S. interest in taking control of Denmark’s autonomous territory.

WTI Crude traded 1.58% lower at $59.66.

The international benchmark, Brent Crude, slipped below the $65 per barrel threshold as investors and speculators returned to assessing the oversupply on the market after the most recent geopolitical flare-ups in Iran and Greenland eased, for now.

The front-month Brent futures traded at $64.27, down by 1.49% on the day.

At the World Economic Forum in Davos, President Trump announced that there is a “framework of a future deal with respect to Greenland”.

The comments were light on details but removed some of the recent tension between the U.S. and the EU over Greenland. President Trump rolled back his threats to impose 10% tariffs on several European countries. The EU was considering tariffs on U.S. products to counter the threat of tariffs over Greenland and the threats to the territory’s sovereignty.

“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland,” President Trump said.

“This solution, if consummated, will be a great one for the United States of America, and all NATO Nations,” the U.S. President added.

The dialing down of the tensions over Greenland shifted the market focus back to the persistent oversupply that has been weighing on oil prices in recent months.

Saudi Aramco’s chief executive officer, Amin ?Nasser, on Thursday played down the outlook that there is an oil glut, saying that forecasts of a massive oversupply are “seriously exaggerated.”

By Tsvetana Paraskova for Oilprice.com

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