Oil prices ease as traders assess US tariffs and OPEC+ output boost
Oil prices retreated on Tuesday, having climbed almost 2% in the previous session, as investors assessed the latest developments on U.S. tariffs and a higher than expected increase to OPEC+ output for August.
Brent crude futures fell 23 cents, or 0.3%, to $69.35 a barrel by 0906 GMT. U.S. West Texas Intermediate crude lost 33 cents, or about 0.5%, to $67.60.
U.S. President Donald Trump began telling trade partners on Monday that sharply higher U.S. tariffs will start on August 1, though he later said that deadline was not 100% firm.
Trump's tariffs have raised uncertainty across the market and concerns that they could have a negative effect on the global economy and oil demand.
Oil prices have been pressured, meanwhile, by the production plans announced on Saturday by the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and its allies. The producer agreed to raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd increases in the previous three months.
Offsetting concerns over potential oversupply was a tight middle distillates market and Houthi attacks on cargo ships in the Red Sea on top of U.S. tariff issues, said PVM Oil Associates analyst Tamas Varga.
Investors were bullish heading into the peak summer demand period in the United States, however, with data from the U.S. Commodity Futures Trading Commission on Monday showing money managers raised their net-long futures and options positions in crude oil contracts in the week to July 1.
Once oil demand declines seasonally, the increase in OPEC+ exports will hit the market, raising downside risks to prices, HSBC analysts said in a note.
The decision by OPEC+ removes nearly all of the 2.2 million bpd of voluntary cuts made by the group since 2023.
The producer group is set to approve an increase of about 550,000 bpd for September when it meets on August 3, according sources told Reuters, which would unwind all of the cuts.
Source: Reuters
