West Texas Intermediate (WTI) oil prices extended losses for the third straight session, trading near $77.20 a barrel during the Asian session on Monday (1/20). Oil traders are on alert ahead of President-elect Donald Trump's inauguration later in the day. US markets will remain closed on Monday in observance of Martin Luther King Jr. Day.

Concerns are mounting over Trump's proposed policies, including potential tariffs, tax cuts and deportations of undocumented immigrants. Analysts note that the future direction of US Federal Reserve (Fed) interest rates will largely depend on how broadly these policies are implemented.

Oil prices rose after Washington imposed two rounds of sanctions on Russia's energy sector over the ongoing Ukraine conflict. Over the past two weeks, the Biden administration has targeted more than 100 tankers and two Russian oil producers.

Attention is now turning to how the new Trump administration will respond to the Biden administration's sanctions. Traders are also seeking clarity on Trump's stance on trade tariffs and potential sanctions on Iran and Venezuela.

However, easing tensions in the Middle East could limit further gains in crude prices. On Sunday, Hamas and Israel exchanged hostages and prisoners, marking the first day of a ceasefire after 15 months of conflict.

Hamas released three female hostages in exchange for 90 Palestinians imprisoned in Israel, according to Bloomberg. In return for the three Israeli hostages, Hamas agreed to release 90 prisoners and detainees, all of whom are believed to be women and children, the Detainees Affairs Commission reported. (AL)

Source: FXstreet