Oil falls as trade war concerns increase worries about fuel demand
Brent crude futures fell 52 cents, or 0.75%, to $68.69 a barrel by 0325 GMT. U.S. West Texas Intermediate crude was at $66.69 a barrel, down 51 cents, or 0.76%. Both benchmarks settled slightly lower on Monday.
The August WTI contract expires on Tuesday and the more active September contract was down 54 cents, or 0.82%, to $65.41 a barrel.
'Broad demand concerns continue to simmer amid escalating global trade tensions, especially as markets eye the latest tariff threats between major economies and Trump's potential announcements ahead of August 1 deadline,' said Priyanka Sachdeva, senior market analyst at Phillip Nova.
'Investors are also eyeing the ripple effects of fresh US sanctions on Russian crude,' she added.
Supply concerns have largely been alleviated by major producers raising output and since a ceasefire on June 24 ended the conflict between Israel and Iran. However, investors are increasingly worried about the global economy amid U.S. trade policy changes.
A weaker U.S. dollar has provided some backing 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.
Sycamore also pointed to the possibility of an escalation in the trade dispute between the U.S. and the EU over 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 on August 1 if a deal is not reached.
There are also signs that rising oil supply has entered the market as the Organization of the Petroleum Exporting Countries and their allies unwind output cuts.
Saudi Arabia's crude oil exports in May rose to their highest in three months, data from the Joint Organizations Data Initiative (JODI) showed on Monday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 hours ago
- Business Recorder
FTSE 100 logs fifth straight weekly gain; investors assess earnings, data
The UK's FTSE 100 closed lower but extended its winning streak to a fifth week on Friday, while investors assessed a mixed bag of corporate earnings and awaited updates on EU-U.S. trade talks. The benchmark FTSE 100 closed 0.2% lower, but registered a weekly gain of 1.4%. The midcap FTSE 250 index also lost 0.2%, but was up 1% for the week. A market relatively shielded from U.S. tariffs, positive corporate updates, optimism over a potential EU-U.S. trade agreement, and hopes of a Bank of England rate cut had boosted the blue-chip index to all-time highs in recent days. Data showed British retail sales rose by 0.9% in June, a partial rebound from May's 2.8% plunge which was the biggest fall since December 2023. However, the increase was smaller than the median forecast of 1.2% in a Reuters poll of economists. A survey showed consumer confidence dipped this month ahead of possible tax increases later this year and households added to their savings. Construction and materials stocks led the sectoral decline, falling 1.8%, dragged down by Marshalls, which tumbled 20.6%, on downbeat full-year adjusted pre-tax profit forecast. Precious metal miners fell 1.3% and industrial miners lost 1%, weighed down by falling gold and copper prices, respectively. In corporate updates, NatWest rose 3.5% after the lender said its profit increased by 18% in the first half and the company announced a new share buyback worth 750 million pounds ($1.01 billion). Wizz Air jumped 11.5% after Barclays upgraded the budget carrier to 'overweight'. Close Brothers surged 4.9% after announcing the sale of its execution services and securities business, Winterflood, to Marex for 103.9 million pounds. On the flip side, Rightmove fell 1.8% after warning it expects sales growth in the second half of 2025 to be lower than the first half's 10%. Meanwhile, the European Union and the United States could reach a framework deal on trade this weekend, EU officials and diplomats said. British Prime Minister Keir Starmer will meet U.S. President Donald Trump on Monday to discuss U.S.-U.K. trade deal.
Business Recorder
2 hours ago
- Business Recorder
Rubio lauds Pakistan's anti-terror role, vows deeper ties in meeting with FM Dar
U.S. Secretary of State Marco Rubio on Friday acknowledged Pakistan's sacrifices in the fight against terrorism and praised its constructive role in promoting regional stability, Aaj News reported. The remarks came during his first in-person meeting with Deputy Prime Minister and Foreign Minister Senator Ishaq Dar, who is on an official visit to the United States. During the meeting, both sides reaffirmed their commitment to strengthening bilateral cooperation across multiple sectors, including agriculture, minerals, and digital technology. The delegation-level talks were attended by senior officials from both sides, including Pakistan's Ambassador to the U.S., Rizwan Saeed Sheikh. Dar received a warm welcome upon arrival and appreciated the U.S. leadership's efforts toward peace. He highlighted Pakistan's potential as an investment destination and reiterated the importance of deepening trade and technology collaboration. The deputy prime minister is also scheduled to speak at the US think tank, The Atlantic Council, sharing Pakistan's perspective on regional and global issues as well as the future of Pak-US relations. Pakistan's Ambassador to the US, Rizwan Saeed Sheikh, and senior embassy officials received Dar at the train station in the US capital. Reciprocal tariff: Pakistan officials to meet Trump administration, Bloomberg reports During his week-long visit, Dar attended high-level signature events of Pakistan's UN Security Council (UNSC) presidency in New York, while he met UN Secretary General António Guterres, on the sidelines of the High-Level Political Forum (HLPF) on Sustainable Development, as well. A day ago, Bloomberg, quoting US State Department Spokesperson Tammy Bruce as saying, reported that a Pakistani delegation will soon meet the administration of US President Donald Trump in a bid to reach an agreement on a trade deal. In a US Department of State press briefing on Wednesday, Bruce said she will attend the meeting between the Pakistani delegation and US officials. Islamabad is looking forward to the 29% reciprocal tariffs to be lifted that the Trump administration initially levied, Bloomberg said. The South Asian country has proposed to increase imports of soybeans and cotton, while it is already the second-largest buyer of US cotton by value, after China. Whereas, Pakistan's biggest export destination is the United States. Bilateral ties between Pakistan and US have improved in recent times, with Trump's holding a rare meeting with Field Marshal Asim Munir at the White House. The FO stated on July 19 that FM Dar's visit is an indication of Pakistan's increasing importance in both its relations with the US and the global landscape. Moreover, in order to complete a trade agreement, Finance Minister Muhammad Aurangzeb has also visited the United States and met with US Secretary of Commerce Howard Lutnick and US Trade Representative Jamieson Greer in Washington recently to advance economic cooperation, as per the Ministry of Finance. Reuters last week reported that the negotiations, focused on reciprocal tariffs, are part of a broader push to reset economic ties at a time of shifting geopolitical alignments and Pakistan's efforts to avoid steep US duties on exports.
Business Recorder
3 hours ago
- Business Recorder
European shares settle lower as investors gauge mixed earnings, EU-US trade progress
European shares closed lower on Friday, as investors assessed mixed corporate earnings while awaiting updates on a framework of an EU-U.S. trade deal that officials said could be reached as early as this weekend. Investors navigated the peaks and troughs around a potential agreement between the two large economies after a busy week of trade discussions with the U.S. culminated in deals with Japan, Indonesia, and the Philippines. The pan-European STOXX 600 index dropped 0.6% to session lows after U.S. President Donald Trump said there was less chance of an agreement with the EU, but pared losses after EU diplomats reiterated that a deal of 15% duties on European goods was still in the works. The index last closed 0.2% lower with most regional bourses in red, but on a weekly basis, the STOXX index was on track for modest gains. 'It's hard to spin it as a good deal, but it would at least avoid much higher U.S. tariffs and retaliation from the EU,' said Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics. 'The reported deal with the U.S. would take a major downside risk off the table for now, weakening the case for further interest rate cuts.' Also weighing on stocks were elevated bond yields that got a lift after the European Central Bank's comments on Thursday tempered expectations of imminent interest rate cuts. European shares close higher after ECB leaves rates unchanged Meanwhile, corporate earnings were in full swing. Puma was the biggest percentage loser on the benchmark index, falling 16%, its largest daily drop in more than four months. The sportswear brand cut its full-year outlook and reported weaker-than-expected quarterly results. London-listed sports retailer JD Sports slipped 0.7% after Puma's results. On the flip side, LVMH gained 3.9% after the French luxury group reported quarterly results, with analysts pointing to hopes on the horizon as the group said it saw signs of recovery in the Chinese market. The broader luxury index rose 1.8% and was the top sectoral performer. Automobile stocks gained 1.4%, boosted by Volkswagen's 4.6% rise after the CEO of Europe's biggest carmaker said cost cuts must be accelerated in response to tariffs. Earlier in the session, shares took a hit on the company's slashed full-year sales and profit margin forecasts. Still, Traton, a truck unit of German automaker Volkswagen, fell 4.1%. Carrefour gained 5.5% after Europe's biggest food retailer reported its half-year results. Attention next week will turn to key events, including policy decisions from the Federal Reserve, earnings from several 'Magnificent Seven' companies, and Trump's August 1 tariff deadline.
