Oil prices fall as tariff deadline looms
Brent crude futures were down 49 cents, or 0.7%, to $68.72 a barrel at 0915 GMT. U.S. West Texas Intermediate crude was at $66.60 a barrel, down 60 cents, or 0.9%.
The August WTI contract expires on Tuesday and the more active September contract was down 47 cents, or 0.7%, to $65.48 a barrel.
"Oil prices fell for a third straight session ... as urgency builds in trade negotiations between the U.S. and its partners," Soojin Kim, an analyst at bank MUFG, said in a note.
The Trump administration has set an August 1 deadline for countries to secure trade deals or face steep tariffs.
The EU is exploring a broader set of possible counter-measures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.
The U.S. has threatened to impose a 30% tariff on EU imports if a deal is not reached.
A weaker dollar has limited some losses for crude as buyers using other currencies are paying relatively less.
Prices have slipped "as trade war concerns offset the support by a softer (U.S. dollar)," IG market analyst Tony Sycamore wrote in a note.
Stronger distillate profit margins due to low inventories are also supporting crude prices.
"The move lower might have seen more momentum if it were not for the continued performance in distillates which continues to be aided by low stocks," PVM Oil analyst John Evans said in a note.
Meanwhile, a Reuters poll of analysts showed U.S. crude oil inventories likely fell by about 600,000 barrels in the week to July 18.
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Sky News
29 minutes ago
- Sky News
PM to hold talks with Trump today - but will have to walk a fine diplomatic line
Gaza and transatlantic trade are set to dominate talks between Donald Trump and Sir Keir Starmer when the pair meet in Scotland later. Downing Street said the prime minister would discuss "what more can be done to secure the ceasefire [in the Middle East] urgently", during discussions at the president's Turnberry golf course in Ayrshire. Talks in Qatar over a ceasefire ended on Thursday after the US and Israel withdrew their negotiating teams. 13:22 Mr Trump blamed Hamas for the collapse of negotiations as he left the US for Scotland, saying the militant group "didn't want to make a deal… they want to die". Sir Keir has tried to forge close personal ties with the president - frequently praising his actions on the world stage despite clear foreign policy differences between the US and UK. The approach seemed to pay off in May when Mr Trump announced the agreement of a trade deal with the UK that would see several tariffs lowered. The two leaders are expected to discuss this agreement when they meet, with the prime minister likely to press the president for a lowering of outstanding tariffs on imports such as steel. 3:31 Prior to the visit, the White House said the talks would allow them to "refine the historic US-UK trade deal". That comes hot on the heels of the US reaching an agreement with the EU, which Mr Trump described as the "biggest dal ever made". This will see 15% tariffs imposed on most European goods entering America, despite the president previously threatening a 30% levy. 1:30 Extracting promises from the president on the Middle East may be harder though. Despite some reports that Mr Trump is growing frustrated with Israel, there is a clear difference in tone between the US and its Western allies. As he did over the Ukraine war, Sir Keir will have to walk a diplomatic line between the UK's European allies and the White House. On Thursday, French President Emmanuel Macron announced his country would formally recognise a Palestinian state in September, the first member of the G7 to do so. That move was dismissed by Mr Trump, who said it "doesn't carry any weight". 0:45 The UK, French and German leaders spoke over the weekend and agreed to work together on the "next phase" in Gaza that would see transitional governance and security arrangements put in place, alongside the large-scale delivery of aid. Under pressure from members of his own party and cabinet to follow France and signal formal recognition of Palestine, Sir Keir has gradually become more critical of Israel in recent months. On Friday, the prime minister said "the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel's disproportionate military escalation in Gaza are all indefensible". Government sources say UK recognition is a matter of "when, not if" - but it's thought Downing Street wants to ensure any announcement is made at a time when it can have the greatest diplomatic impact. 1:19 Cabinet ministers will be convened in the coming days, during the summer recess, to discuss the situation in Gaza. The UK has also been working with Jordan to air drop supplies, after Israel said it would allow foreign countries to provide aid to the territory. Donald Trump's trip to Scotland comes ahead of his second state visit to the UK in September. Downing Street says Ukraine will also likely be discussed in the meeting with both men reflecting on what can be done to force Russia back to the negotiating table. After the meeting at Turnberry, the prime minister will travel with the president to Aberdeen for a private engagement.
Reuters
39 minutes ago
- Reuters
Gold falls to near two-week low after US, EU agree to tariff deal
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Reuters
39 minutes ago
- Reuters
EU's pledge for $250 billion of US energy imports is delusional
LAUNCESTON, Australia, July 28 (Reuters) - There are strong echoes of Donald Trump's failed trade deal with China from his first term as U.S. president in the framework agreement reached with the European Union. Trump and EU Commission President Ursula von der Leyen announced the deal for a 15% tariff on U.S. imports of EU goods at the U.S. leader's golf course in Scotland on Sunday. But more important than the 15% tariff rate was the apparent commitment by the EU to massively ramp up energy imports from the United States. The agreement calls for EU imports of U.S. energy, which currently are mainly crude oil and liquefied natural gas (LNG), of $250 billion a year for three years. This is a delusional level of imports that the EU has virtually no chance of meeting, and one that U.S. producers would also struggle to supply. Even if the EU did manage somehow to boost its energy imports from the United States to the $250 billion a year mark, it would also prove massively disruptive for energy flows around the rest of the world. The numbers show the scale of the challenge. The 28 members of the EU imported 3.38 billion barrels of seaborne crude oil in 2024, according to data compiled by energy analysts Kpler. Assuming the 2025 volume stays the same and the price paid per barrel averages around $70, this means the EU will pay about $236.6 billion for its crude. The EU's imports from the United States were 573 million barrels in 2024, which if replicated this year would be valued at around $40.1 billion. For LNG, the EU imported 82.68 million metric tons in 2024, which would have cost around $51.26 billion assuming an average price of around $12 per million British thermal units (mmBtu). Imports of the super-chilled fuel from the United States were 35.13 million tons in 2024, worth about $21.78 billion. The EU also buys coal from the United States, the bulk being higher-value metallurgical coal used to make steel. Total EU imports of metallurgical coal in 2024 were worth $6.72 billion, assuming an average price of $200 per ton, with those from the United States valued at $2.67 billion. Putting together the value of EU imports of U.S. crude oil, LNG and metallurgical coal gives a 2024 total of around $64.55 billion. This is about 26% of the $250 billion the EU is supposed to spend on U.S. energy a year under the framework agreement. If the EU did ramp up its imports of U.S. crude, LNG and metallurgical coal to $250 billion, it would account for 85% of its total spending on those energy commodities. The United States exported 1.45 billion barrels of crude in 2024, according to Kpler, which would be worth $101.5 billion at a price of $70 a barrel. U.S. shipments of LNG were 87.05 million tons in 2024, which would be worth about $54 billion at an average price of $12 per mmBtu. The U.S. exported 51.53 million tons of metallurgical coal in 2024, worth $10.3 billion at an average price of $200 a ton. Putting together the value of all three energy commodities gives a total of $165.8 billion, meaning that even if the EU bought the entire volume it would still fall well short of the $250 billion. The scale of the delusion probably exceeds what Trump and China agreed in their so-called Phase 1 trade deal in December 2019, under which China was supposed to buy $200 billion of additional U.S. energy by the end of 2021. The reality is that China never even came close to buying that level, and its imports of U.S. energy didn't even reach what they were before Trump launched his first trade war in 2017. There are a few caveats when looking at the framework agreement between Trump and Von der Leyen. The first is that not all the details are known and the $250 billion of energy is also said to include nuclear fuel, although this will only be a small value even if included. The second is the deal will probably include refined fuels, with U.S. exports to the EU of products such as diesel, being almost 110 million barrels in 2024, worth about $10.9 billion assuming a price of $100 a barrel. But it's still clear that the commitment to buy $250 billion in U.S. energy is completely unrealistic and unachievable. The smart people in the room must know this, begging the question as to why agree to what is obviously a ridiculous number? What happens when the inevitable failure is realised? Perhaps the EU is hoping for the same outcome as China did with the first trade war with Trump in 2019. Run down the clock, talk nice, and hope the next U.S. president is easier to deal with. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, opens new tab and X, opens new tab. The views expressed here are those of the author, a columnist for Reuters.
