Oil prices fell on Wednesday, extending the previous session's decline as markets digested U.S. President Donald Trump's declaration of a national energy emergency on his first day in office and eyed his tariff policies.

Brent crude futures fell 36 cents, or 0.5%, to $78.93 a barrel by 0730 GMT. U.S. West Texas Intermediate crude futures fell 46 cents, or 0.6%, to $75.37.

Crude prices closed lower on Tuesday after Trump laid out a sweeping plan to boost oil and gas production, including declaring a national energy emergency to speed up permitting, roll back environmental protections and withdraw the U.S. from the Paris climate pact.

"Market participants are trying to digest the mixed signals that Trump 2.0 brings to the trajectory of oil prices," said Yeap Jun Rong, market strategist at IG.

"Near-term focus will be on whether the goal is to fill the U.S. strategic reserve," Yeap said.

Trump's latest energy policies are unlikely to spur near-term investment or change U.S. production growth, analysts at Morgan Stanley (NYSE:MS) wrote in a note, adding that they could moderate potential erosion in refined product demand.

Analysts also questioned whether Trump's pledge to replenish the strategic reserve would make a difference to oil demand as the Biden administration is already buying oil for emergency supplies.

Meanwhile, investors were cautious as Trump said he was considering imposing 25% tariffs on imports from Canada and Mexico starting Feb. 1, rather than on his first day in office as previously promised.

"Oil market attention is slowly shifting from U.S. sanctions on Russia to President Trump's potential trade policies," ING analysts said Wednesday, adding that the energy complex has been under pressure with the threat of tariffs escalating.

The U.S. president said his administration would "probably" stop buying oil from Venezuela, one of the country's top oil suppliers.

Meanwhile, a rare winter storm hit the U.S. Gulf Coast on Tuesday.

North Dakota oil production is expected to drop between 130,000 and 160,000 barrels per day (bpd) due to extreme cold and related operational challenges, the state's pipeline authority said Tuesday.

The storm's impact on oil and gas operations remains limited in Texas, with minimal disruptions in gas flows, few power outages and plenty of gasoline at the pump, as many roads and highways remain closed.

Source: Investing.com