Oil price falls as trade war concerns increase worries about fuel demand
Brent crude futures fell 52c, or 0.75%, to $68.69 (R1,209) a barrel by 3.25 GMT. US West Texas Intermediate crude was at $66.69 (R1,174) a barrel, down 51c, or 0.76%. The benchmarks settled slightly lower on Monday.
The August West Texas Intermediate contract expires on Tuesday and the more active September contract was down 54c, or 0.82%, to $65.41 (R1.151) a barrel.
'Broad demand concerns continue to simmer amid escalating global trade tensions, specially as markets eye the latest tariff threats between major economies and [US President Donald] Trump's potential announcements ahead of the 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 said.
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 US trade policy changes.
A weaker US 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 (US 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 US and the EU over tariffs.
The EU is exploring a broader set of possible countermeasures against the US as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats. The US has threatened to impose a 30% tariff on EU imports on August 1 if a deal is not reached.
There are also signs 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 showed on Monday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
an hour ago
- Daily Maverick
US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war
Deal includes $600 billion EU investments in US, more EU energy, defence purchases 15% tariff better than threatened 30%, in deal mirroring Japan's US steel and aluminium tariffs remain at 50% By Andrew Gray and Andrea Shalal The announcement came after European Commission President Ursula von der Leyen travelled for talks with U.S. President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. 'I think this is the biggest deal ever made,' Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied 'across the board'. 'We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,' she said. The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of U.S. energy and military equipment, will indeed bring clarity for EU companies. However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate. The deal mirrors parts of the framework agreement the United States clinched with Japan last week. 'We are agreeing that the tariff… for automobiles and everything else will be a straight across tariff of 15%,' Trump said. However, the 15% baseline rate would not apply to steel and aluminium, for which a 50% tariff would remain in place. Trump, who is seeking to reorder the global economy and reduce decades-old U.S. trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of '90 deals in 90 days.' He has periodically railed against the European Union saying it was 'formed to screw the United States' on trade. Arriving in Scotland, Trump said that the EU wanted 'to make a deal very badly' and said, as he met von der Leyen, that Europe had been 'very unfair to the United States'. His main bugbear is the U.S. merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to U.S. Census Bureau data. The EU points to the U.S. surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the 'hundreds of billions of dollars' that tariffs were bringing in. On July 12, Trump threatened to apply a 30% tariff on imports from the EU starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros ($109 billion) of U.S. goods in the event there was no deal and Trump had pressed ahead with 30% tariffs. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target U.S. services in the event of a no-deal.
Daily Maverick
an hour ago
- Daily Maverick
SA practising damaging politics of the zero-sum game
While there are many prisms through which you can attempt to understand our politics, one may be to examine whether people see the entire process as a zero-sum game. There may now be mounting evidence that more politicians and voters believe every single issue must be reduced to winners and losers. Anyone with much experience of life will be aware that, as a general rule, when life improves for one person, it often improves for another. This happens in an economy all the time. It is well known that one restaurant in one city block might be popular enough to bring in a certain number of customers. But a group of competing restaurants in the same place are much more likely to bring in a much bigger number. In other words, you are more likely to be successful through sharing space with other restaurants. Growing an economy might well rest on this. One cannot just make a product and sell it on your own. You need to be part of a chain that enables your market and ensures you have both suppliers to help you make your product, and customers to buy it. People who are thinking over the longer term will often make decisions that will cost them in the short run, because they expect to gain in the longer run. Last week, Moneyweb reported that some suppliers to Pick n Pay were actually giving it goods at lower than usual prices. While this costs them in the short run, they don't want a situation where Checkers becomes so dominant they only have one person to sell to. This means that they are helping someone to regain market share. In the case of South Africa, with its incredibly diverse constituencies, and defined by its inequality, the idea of people helping one another might well be more important than in many other places. Winners and losers The nature of our economy requires everyone to be working in the same direction. Instead, what we have is people simply fighting really hard not to be the losers, and others not the winners. Currently, 50 proposals to change the Labour Relations Act are going through Nedlac. While labour analyst Andrew Levy says it's not clear if they really change the balance between workers and managers, several groups and unions have already held a protest against the proposals. They believe that their members might soon lose out, and managers might win. This kind of situation happens all the time in our society. In our politics, the coalition sometimes appears to be reduced to fights between the ANC and the DA that are literally about ensuring one wins and the other loses. Because this is all happening in public, and they are representing constituencies, it can give the impression that those constituencies are really fighting to ensure they are not seen to lose. This transactional approach, and the damage it can cause, is wonderfully, and horrifically, illustrated by the Trump administration's approach to trade. One of the most important dynamics of the past 30 years has been the rise of China as a manufacturer of trade goods. It has made these goods at a cheaper price than many other places, and sold them. This has exported deflation around the world – the price of a cheap bicycle has declined dramatically in real terms since the 1980s. This is largely because companies in different countries have traded with each other. And both parties have become very rich doing so. Trump appears to believe that if one country is getting rich, the other must be losing out. The overwhelming evidence is that this is not the case. Instead, both parties win through these transactions. In some ways, such is the impact of the US, that this example might well be having an impact on our politics. At the same time, another important aspect of how life really works is being lost. In many cases, there is no clear 'winner' and clear 'loser'. Often it is entirely grey, with very little difference in shade. The NHI stand-off In our politics now, it seems that everything must become a life and death situation, that there will be armageddon if someone does not get what they want. Given our inequality, this can sometimes appear as if it is a life-and-death struggle between classes. The NHI might be a useful example: those who support it say the rich are trying to condemn the poor to death, those who oppose it say the rich will lose everything they have. Instead, this is something that should really be negotiated between representatives of constituencies. And there should be a solution that everyone can live with. There are many reasons why we are in this situation. Our racialised inequality must be an important reason. Those who are poor have everything to gain and nothing to lose, while those who are rich have everything to lose and nothing to gain. But this may also be the result of deliberate political strategy. Just as politicians have created abortion as a political issue in the US, by forcing people to take a position, so our leaders often do the same. Both the ANC and the DA benefit from continuing the fight around the NHI. They both get to demonstrate to their constituencies that they are fighting for them. And because the struggle for voters is now so difficult and so intense, the stakes rise each time, and so it is more likely that politicians will behave in this way. All of this feeds an artificial intensity in our politics.
TimesLIVE
an hour ago
- TimesLIVE
US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war
The United States struck a framework trade deal with the European Union on Sunday, imposing a 15% US import tariff on most EU goods, but averting a spiralling battle between two allies which account for almost a third of global trade. The announcement came after European Commission President Ursula von der Leyen travelled for talks with US President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. "I think this is the biggest deal ever made," Trump told reporters after an hour-long meeting with von der Leyen, who said the 15% tariff applied "across the board". "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The deal, that also includes $600 billion of EU investments in the United States and significant EU purchases of U.S. energy and military equipment, will indeed bring clarity for EU companies. However, the baseline tariff of 15% will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% rate. The deal mirrors parts of the framework agreement the United States clinched with Japan last week. "We are agreeing that the tariff... for automobiles and everything else will be a straight across tariff of 15%," Trump said. However, the 15% baseline rate would not apply to steel and aluminium, for which a 50% tariff would remain in place. Trump, who is seeking to reorder the global economy and reduce decades-old U.S. trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of "90 deals in 90 days." He has periodically railed against the European Union saying it was "formed to screw the United States" on trade. Arriving in Scotland, Trump said that the EU wanted "to make a deal very badly" and said, as he met von der Leyen, that Europe had been "very unfair to the United States". His main bugbear is the US merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the "hundreds of billions of dollars" that tariffs were bringing in. On July 12, Trump threatened to apply a 30% tariff on imports from the EU starting on August 1, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros ($109 billion) of US goods in the event there was no deal and Trump had pressed ahead with 30% tariffs. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target US services in the event of a no-deal.
