Oil Prices Advance as US Court Blocks Trump Tariffs
Oil prices rose on Thursday after a US court blocked most of President Donald Trump's tariffs, while the market was watching out for potential new US sanctions curbing Russian crude flows and an OPEC+ decision on hiking output in July.
Brent crude futures were up 19 cents, or 0.3%, to $65.09 a barrel at 1215 GMT. US West Texas Intermediate crude was up 24 cents, or 0.4%, to $62.08 a barrel.
A US trade court on Wednesday ruled that Trump overstepped his authority by imposing across-the-board duties on imports from US trading partners. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium using a different statute, Reuters reported.
"Markets are positive since Donald Trump got the setbacks on the tariffs," said Bjarne Schieldrop, chief commodities analyst at SEB. "That's less headwind for the global economy, so more demand for oil because the machine of the global economy moves better and faster."
The ruling buoyed risk appetite across global markets, which have been on edge over the impact of the levies on economic growth, but some analysts said the relief may only be temporary given the Trump administration has said it will appeal.
"But for now, investors get a breather from the economic uncertainty they love to loathe," said Matt Simpson, an analyst at City Index in Brisbane.
On the oil supply front, there are concerns about potential new sanctions on Russian crude. At the same time, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, could agree on Saturday to accelerate oil production hikes in July.
"We're assuming the group will agree on another large supply increase of 411,000 barrels per day. We expect similar increases through until the end of the third quarter, as the group increases its focus on defending market share," ING analysts said in a note.
Adding to supply risks, Chevron has terminated its oil production and a number of other activities in Venezuela, after its key license was revoked by the Trump administration in March.
Venezuela in April cancelled cargoes scheduled to Chevron, citing payment uncertainties related to US sanctions. Chevron was exporting 290,000 barrels per day of Venezuelan oil, or over a third of the country's total, before that.
"From May through August, the data points to a constructive, bullish bias with liquids demand set to outpace supply," Mukesh Sahdev, global head of commodity markets at Rystad Energy, said in a note, expecting demand growth to outpace supply growth by 600,000 to 700,000 bpd.
Later on Thursday, investors will be watching for the weekly reports from the American Petroleum Institute and the Energy Information Administration, the statistical arm of the US Department of Energy.
According to market sources familiar with the API data, US crude and gasoline stocks fell last week while distillate inventories rose.
Meanwhile, a wildfire in the Canadian province of Alberta has forced residents of a small town to evacuate and prompted a temporary shutdown of some oil and gas production, which could reduce supply.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Arabiya
33 minutes ago
- Al Arabiya
Russia says no quick breakthrough in ‘complex' Ukraine talks
Russia has said it was wrong to expect a quick breakthrough in Ukraine talks, after Moscow rejected Kyiv's call for an unconditional ceasefire at negotiations in Istanbul. The sides agreed on a large-scale swap of captured soldiers and exchanged their roadmaps to peace, or so-called 'memorandums', at the discussions, which lasted less than two hours. More than three years into Russia's offensive -- which has killed tens of thousands on both sides and forced millions from their homes in eastern Ukraine -- the two sides appear as irreconcilable as ever. 'The settlement issue is extremely complex and involves a large number of nuances,' Kremlin spokesman Dmitry Peskov told reporters on Tuesday. 'It would be wrong to expect immediate solutions and breakthroughs,' he added. Moscow demanded Ukraine pull its troops out of four eastern and southern regions that Moscow claims to have annexed as a precondition to pausing its offensive, according to the document handed to the Ukrainians that was published by Russian state media. Kyiv had pressed for a full and unconditional ceasefire. Russia instead offered a partial truce of two to three days in some areas of the frontline, its top negotiator said after the talks. Ukraine's Foreign Minister Andriy Sybiha on Tuesday denounced Russia for presenting 'old ultimatums that do not move the situation any closer to true peace' and for having 'so far rejected any meaningful formats for a ceasefire.' Peskov earlier also dismissed the idea of a summit between the presidents of Russia, Ukraine and the United States. 'In the near future, it is unlikely,' Peskov told reporters when asked about the chances of the leaders meeting, adding that such a summit could only happen after Russian and Ukrainian negotiators reach an 'agreement.' The White House had said on Monday that US President Donald Trump was 'open' to the idea, which is also backed by Ukraine's Volodymyr Zelenskyy and Turkey's Recep Tayyip Erdogan. Targeting civilians Zelenskyy on Tuesday accused Russia of 'deliberately' targeting civilians in a rocket attack on the city of Sumy, some 30 kilometers (18 miles) from the Russian border, that killed four people. Russian troops have accelerated their advance, seeking to establish what Putin called a 'buffer zone' inside Ukraine's northeastern Sumy region. Zelenskyy posted a video from the emergency services showing destroyed cars and the body of one victim lying on the road. The attack 'says everything one needs to know about Russia's so-called 'desire' to end this war,' he added, calling for 'decisive actions' from the United States and Europe to push Russia into a ceasefire. 'Every day, Russia gives new reasons for tougher sanctions and stronger support for our defense,' he said. A seven-year-old girl was among 20 wounded, with doctors 'fighting for her life,' Sumy's Acting Mayor Artem Kobzar said. Three people were also killed in a rocket attack in the northeastern Kharkiv region. Moscow's army said it had captured the village of Andriivka in the Sumy region, located around five kilometers (three miles) from the Russian border. Zelenskyy said last week that Russia was massing some 50,000 soldiers for an offensive on the region. Meanwhile, Ukraine's SBU security service claimed it had hit a pillar of the Crimean bridge linking the annexed peninsula to Russia with an underwater explosive device. The extent of the damage was unclear following a temporary closure to the bridge after the attack. A delegation of top Ukrainian officials also landed in Washington for talks with US officials on defense and economic issues, including the possibility of new sanctions, Zelenskyy's office said. Andriy Yermak, Zelenskyy's top aide and a member of the delegation, met with US envoys Steve Witkoff and Keith Kellogg. 'I emphasized that Russia is stalling and manipulating the negotiation process in an attempt to avoid American sanctions, and has no genuine intention of ceasing hostilities,' Yermak wrote on social media. 'Only strong sanctions can compel Russia to engage in serious negotiations.' Meanwhile, Russia's top security official Sergei Shoigu was in Pyongyang on Wednesday for talks with North Korean leader Kim Jong Un. The two countries have drawn closer in recent years, with North Korea sending troops and weapons to support Moscow's war effort. Russian news agencies reported Shoigu and Kim were expected to discuss issues including Ukraine. Trump, who said he could end the conflict swiftly when he returned to the White House in January, has repeatedly expressed anger at both Putin and Zelenskyy as the fighting drags through its fourth year with no end in sight. But he has held off from imposing new economic penalties on Moscow.
Al Arabiya
2 hours ago
- Al Arabiya
US pushes countries for best offers by Wednesday as tariff deadline looms
The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters. The draft, from the office of the United States Trade Representative, provides a window into how President Donald Trump plans to bring to a close unwieldy negotiations with dozens of countries that kicked off on April 9 when he paused his 'Liberation Day' tariffs for 90 days until July 8 after stock, bond and currency markets revolted over the sweeping nature of the levies. The document suggests an urgency within the administration to complete deals against its own tight deadline. While officials such as White House economic adviser Kevin Hassett have repeatedly promised that several agreements were nearing completion, so far only one agreement has been reached with a major US trading partner: Britain. Even that limited pact was more akin to a framework for ongoing talks than a final deal. In the draft, the US is asking countries to list their best proposals in a number of key areas, including tariff and quota offers for purchase of US industrial and agricultural products and plans to remedy any non-tariff barriers. Other requested items include any commitments on digital trade and economic security, along with country-specific commitments, according to the letter. The US will evaluate the responses within days and offer 'a possible landing zone' that could include a reciprocal tariff rate, according to the letter. It was unclear which countries would receive the letter, but it was directed at those with active negotiations that included meetings and exchanges of documents. Washington has been engaged in such talks with the European Union, Japan, Vietnam and India, among others. A USTR official said trade talks were ongoing. 'Productive negotiations with many key trading partners continue at a rapid pace. It is in all parties' interest to take stock of progress and assess any next steps.' 'Regardless of ongoing litigation' Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council, welcomed the USTR moves. 'We are encouraged that USTR is moving negotiations ahead as quickly as they can,' she told Reuters, adding that trade deals that removed barriers for US companies abroad and lowered US tariffs would be 'a win-win if they are done in a way that returns predictability and stability to trade relationships.' Trump's ambitious - and often frenetic - tariff policy is a pillar of his 'America First' economic agenda as he seeks to reshape US trade relationships, reduce trade deficits and protect American industries. Republican lawmakers are also banking on tariffs to add to federal revenue and offset the cost of the tax cut legislation now working its way through Congress. Trump's tariff policies have taken investors on a rollercoaster ride. In May, US stocks held their biggest rally of any month since November 2023, but that was after global indexes had cratered under the barrage of Trump's tariff announcements through February, March and early April. Stocks were little changed on Monday afternoon after Trump announced a surprise doubling of tariffs on steel and aluminum imports on Friday at an event in Pittsburgh. Meanwhile, the legality of the approach used for imposing the most sweeping of his tariffs has been cast into doubt. Last Wednesday, the Court of International Trade ruled that Trump had overstepped his authority with tariffs devised under the International Emergency Economic Powers Act, including the 'Liberation Day' levies and earlier ones imposed on goods from Canada, Mexico and China related to Trump's accusations that the three countries have facilitated the flow of fentanyl into the US Less than 24 hours later, an appeals court temporarily paused that decision. The tariffs at the center of the legal dispute are expected to remain in effect as the case plays out. The draft letter to trading partners warns them not to believe the tariffs will be sidelined if the court rules against Trump's use of the IEEPA. 'Regardless of ongoing litigation concerning the President's reciprocal tariff action in US courts, the President intends to continue this tariff program pursuant to other robust legal authorities if necessary, so it is important that we continue our discussions on these matters,' the draft says.
Al Arabiya
2 hours ago
- Al Arabiya
US steel, aluminum tariff hikes to take effect Wednesday: White House
The United States will double its tariffs on imported steel and aluminum starting Wednesday, according to the White House, as it published an order signed by President Donald Trump. The move marks the latest salvo in Trump's trade wars, bringing levies on both metals from 25 percent to 50 percent. But tariffs on metal imports from the UK will remain at the 25 percent rate, while both sides work out duties and quotas in line with the terms of their earlier trade pact. Overall, the aim is to 'more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States,' according to the order, which added that these undercut the competitiveness of US industries. 'Increasing the previously imposed tariffs will provide greater support to these industries and reduce or eliminate the national security threat posed by imports of steel and aluminum articles and their derivative articles,' the order added. Trump announced his decision to hike tariffs on steel and aluminum when he addressed workers at a US Steel plant in Pennsylvania last week. 'Nobody is going to be able to steal your industry,' he said at the time. 'At 25 percent, they can sort of get over that fence. At 50 percent, they can no longer get over the fence,' he added. The move, however, fans tensions with key US trading partners. The European Union warned over the weekend that it was prepared to retaliate against levies. It said that the sudden announcement 'undermines ongoing efforts to reach a negotiated solution' between the bloc and the United States. Already, Washington is in talks with various countries after Trump imposed sweeping 10 percent tariffs on almost all partners in April and announced even higher rates for dozens of economies. While the steeper levels have been paused during ongoing negotiations, this halt expires in early July—adding to urgency to reach trade deals. Since returning to the presidency in January, Trump has imposed sweeping tariffs on allies and adversaries alike in moves that have shaken financial markets. He has also imposed tariffs on sector-specific imports like autos, apart from targeting steel and aluminum. Mexico will request an exemption from the higher tariff, Economy Minister Marcelo Ebrard said, arguing that it is unfair because the United States exports more steel to Mexico than it imports. 'It makes no sense to put a tariff on a product in which you have a surplus,' Ebrard said. Mexico is highly vulnerable to Trump's trade wars because 80 percent of its exports go to the United States, its main trading partner.
