Supply vs. Tariffs, Prices Fall
Oil prices reversed their downward trajectory after a four-day rally. Traders awaited clearer signals on supply while monitoring the broader impact of US President Donald Trump's decision to dismiss Fed Chair Lisa Cook. This morning, Asia time, Brent was trading in the high-$68 range and WTI was around $64 after rallying to a two-week high in the previous session. Concerns about central bank independence also weighed on risk appetite.
On the policy front, the US Department of Homeland Security (DHS) released a draft notice to double tariffs on Indian products to 50% starting Wednesday, as a sanction for purchases of Russian oil. This move adds pressure on Washington's efforts to push forward Russia-Ukraine peace talks. New Delhi criticized the planned "secondary tariffs" as unfair.
Broader markets weakened, with the US dollar and Treasuries fluctuating after the announcement of Lisa Cook's dismissal sparked legal debate and concerns about political interference in the Fed. This cautious sentiment could weigh on the energy demand outlook if the US economic downturn extends. For now, declining risk appetite is limiting oil price gains.
Fundamentally, oil is still consolidating. OPEC+ has increased production in recent months—including an additional ~547,000 bpd for September—while the IEA warns of the risk of a surplus heading into 2026 despite supply disruptions from Ukrainian drone attacks on Russian energy infrastructure. The combination of increased supply and geopolitical risks has kept prices moving within a narrow range. (ayu)
Source: Newsmaker.id
