Oil Rises Slightly After Powell's Dovish Signal
Oil prices edged higher after Fed Chairman Jerome Powell left open the option of a September interest rate cut, while the Trump administration reiterated pressure on India over Russian oil purchases ahead of tariff increases. WTI approached US$64/barrel as the dollar weakened and riskier assets rallied. Brent opened trading at $67.56/barrel.
Powell's more dovish-than-expected comments pushed stocks and oil to intraday highs. The prospect of lower interest rates is seen as supporting growth and fuel demand, while also lowering financing and storage costs for oil market participants.
On the geopolitical front, White House trade adviser Peter Navarro again criticized India, and President Donald Trump threatened 50% tariffs on Indian imports, half of which would be due to purchases of Russian oil. However, Indian refineries have resumed purchases after a brief pause, and Moscow officials expect supply flows to resume.
Hopes for a Russia-Ukraine peace deal are low; President Volodymyr Zelenskiy stated that there has been no contact for negotiations. Amid thin summer liquidity, oil prices have tended to move sideways in recent weeks, awaiting new catalysts as market participants return to activity.
Future outlook: Morgan Stanley analysts predict a large supply surplus in the fourth quarter—likely to put downward pressure on prices, but as it is widely anticipated, the likelihood of a chaotic sell-off is slim. Key points: Powell's dovishness → risk-on sentiment; US–India tariffs → headline risk; India continues to buy Russian oil; Q4 has potential for oversupply. (ayu)
Source: Newsmaker.id
