Oil Prices Stabilize, Market Focuses on Trade Tariffs and US Stockpiles
Crude oil prices stabilized after declining for four consecutive sessions. Brent crude traded below $69 per barrel, while West Texas Intermediate (WTI) remained above $65. Investors are now awaiting developments in the United States trade negotiations, especially after President Donald Trump announced he would impose tariffs ranging from 15% to 50% if no trade deal is reached by the August 1 deadline. Currently, a 15% tariff has officially been imposed on Japan, and the European Union is reportedly working toward a similar agreement.
Market optimism stems from the expectation that the negative impact of tariffs on energy demand will be minimal. Vishnu Varathan of Mizuho Bank noted that "there is some buoyancy" as the market assesses that the worst-case scenario of tariffs has been averted. However, he cautioned that this support could be temporary, and global growth remains at risk of being depressed. Market attention is also focused on Thursday's crucial meeting between Chinese President Xi Jinping and European Union representatives, the first such summit since 2023.
On the supply side, data shows that US national crude oil inventories fell by 3.2 million barrels in the past week. However, stocks at the Cushing storage hub—the main delivery point for the WTI contract—actually rose for the third consecutive week. Diesel fuel inventories increased, but remained at their lowest seasonal level since 1996, indicating a still-tight fuel market amid the summer heat.
Global supply factors are also in the spotlight. OPEC+ production is expected to increase along with increased production quotas, potentially flooding the market. Meanwhile, the European Union's latest sanctions against Russia add to uncertainty, especially for importing countries like India. US Treasury Secretary Scott Bessent said that China's purchases of Russian and Iranian oil are likely to be on the agenda for trade negotiations between the two countries next week.
Source: Newsmaker.id
