Oil edges lower as trade war concerns increase worries about fuel demand
Brent crude futures fell 24 cents, or 0.35%, to $68.97 a barrel by 0055 GMT after settling 0.1% lower on Monday.
U.S. West Texas Intermediate crude was at $66.99 a barrel, down 21 cents, or 0.31%, following a 0.2% loss in the previous session.
The August WTI contract expires on Tuesday and the more active September contract was down 23 cents, or 0.35%, to $65.72 a barrel.
Still, the oil market has struggled to find any direction since the ceasefire on June 24 ending the conflict between Israel and Iran removed concerns about major supply disruptions in the key Middle East producing region.
Since then, Brent has traded in a range of $5.19 and WTI in a range of $5.65 as supply concerns have been alleviated by major producers raising output and investors are increasingly worried about the global economy amid U.S. trade policy changes. However, 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 rising 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. (Reporting by Anjana Anil in Bengaluru; Editing by Christian Schmollinger)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
3 hours ago
- Gulf Today
The need to focus on the economy's significance
The size of the national debt has become a preoccupation across the political spectrum. Democrats have complained about the $3.4 trillion increase in the debt projected to result from President Donald Trump's tax cut. This represents 10 percent of the projected gross domestic product for 2035. Republicans also scream about the debt, even as they pass tax cuts to make it larger at every opportunity. Let's be clear: The bulk of the current deficit is the result of reduced tax revenue, not legislated increases in spending. Tax revenue peaked at 20% of GDP in 2000. For those who don't remember, the economy was booming that year, with a 4% unemployment rate and 4.1% GDP growth, according to the Tribune News Service. The latest projections, following the passage of Trump's tax cuts, show that tax revenue will be just over 16% of GDP next year. The loss of tax revenue, compared with the 2000 peak, will add $1.2 trillion to the 2026 deficit. While spending has increased relative to the economy, most of the increase was not due to profligate government spending but rather the result of higher Social Security and Medicare spending. This rise is because the huge baby boom cohort was in their prime working years in 2000. Now they are in their 60s and 70s and mostly collecting benefits from these programmes. Stepping back from the causes of deficits and debt for a moment, we should ask: Is the debt a big problem? A debt of $35 trillion or $40 trillion can scare people and be good fodder for political rhetoric, but the real question is how it affects people's lives. None of us sees the debt, in the sense that it does not directly affect us in our daily lives. We do see the economy. We know whether it is creating jobs and whether wages are outpacing prices. If the economy can generate growth at a respectable pace and it is broadly shared, we can say that we, and our children, will be better off in the future than we are today. If the economy can sustain 2.5% growth, we will, on average, be 30% richer 10 years from now. And that will be true even if the debt continues to grow as is now projected. Despite the fearmongering rhetoric, investors will not flee from holding the assets and the currency of a country with a strong, rapidly growing economy. However, recent policy decisions should make us question whether we will have a strong, rapidly growing economy. The Trump administration has made it a top priority to sever longstanding trade relations, instead imposing tariffs and making deals that have the lifespan of one of his golf games. This will make other countries reluctant to trade with the United States. Canada, the European Union, and much of the rest of the world are rapidly looking to make trade deals that exclude the United States. Trump is also attempting to chase out a large share of the US workforce. This is most immediately the case with undocumented workers who mostly hold low-paying jobs in construction, restaurants and farming. However, the anti-immigrant policies are also chasing away highly skilled workers who are concerned about being targeted by ICE agents empowered to arrest and detain anyone they decide could be undocumented. The Trump administration is also gutting funding for the research that has been the basis of US leadership in areas like medical technology and artificial Intelligence. It has declared war on the energy revolution, removing subsidies and imposing taxes on electric vehicles and clean energy. These policies almost seem designed to be an axe blow to the country's economy. A year ago, the economy was growing at a healthy pace, unemployment was low, and inflation was falling; we were seeing an unprecedented boom in factory construction.
The National
3 hours ago
- The National
How the climate crisis is creating millions of refugees in the Middle East
• Remittance charges will be tackled by blockchain • UAE's monumental and risky Mars Mission to inspire future generations, says minister • Could the UAE drive India's economy? • News has a bright future and the UAE is at the heart of it • Architecture is over - here's cybertecture • The National announces Future of News journalism competition • Round up: Experts share their visions of the world to come
Khaleej Times
4 hours ago
- Khaleej Times
Trump, Fed chief Powell bicker during tense central bank visit
Donald Trump and US Federal Reserve chairman Jerome Powell appeared together for a tense meeting Thursday as the president toured the central bank after ramping up his attacks on its management of the economy. Trump — who wants to oust Powell for refusing to lower interest rates but likely lacks the legal authority to do so — has threatened to fire the Fed chief over cost overruns for a renovation of its Washington headquarters. During a brief but painfully awkward exchange in front of reporters during a tour of the building, the pair bickered over the price tag for the makeover, which Trump said was $3.1 billion. Stay up to date with the latest news. Follow KT on WhatsApp Channels. The actual cost of the facelift has been put at $2.5 billion and Powell was quick to correct the president, telling him, "I haven't heard that from anybody." Trump produced a sheet of paper apparently listing construction costs and was told curtly that he was including work on the William McChesney Martin Jr. Building, which was not part of the project. "You're including the Martin renovation — you just added in a third building," Powell scolded. Trump stuck to his guns, saying it was part of the overall redevelopment. Powell shot back, "No, it was built five years ago. We finished Martin five years ago... It's not new." Trump moved on but the tense atmosphere between the pair was almost palpable, with the Republican leader unaccustomed to being contradicted live on air. The tour came with Trump desperate to shift the focus away from the crisis engulfing his administration over its decision to close the file on multi-millionaire sex offender Jeffrey Epstein, who died in 2019 while awaiting trial on trafficking charges. Attorney General Pam Bondi informed the president in the spring that his name appeared in the Epstein files, according to the Wall Street Journal. Epstein was accused of procuring underage girls for sex with his circle of wealthy, high-profile associates when he died by suicide in a New York jail cell. Trump has picked all manner of targets, including his Democratic predecessors and former chiefs of the security and intelligence services, as he tries to move Epstein out of the headlines. He berated Powell over interest rates on Wednesday, and alluded to his annoyance over the cost of borrowing more than 10 times during Thursday's tour. "As good as we're doing, we'd do better if we had lower interest rates," he told reporters. 'Do the right thing' Presidential visits to the Federal Reserve are not unheard of — Franklin D. Roosevelt, Gerald Ford and George W. Bush all made the trip — but they are rare. Trump has criticized Powell for months over his insistence on keeping the short-term interest rate at 4.3 percent this year, after cutting it three times last year, when Joe Biden was in office. Powell says he is monitoring the response of the economy to Trump's dizzying array of import tariffs, which he has warned could lead to a hike in inflation. But Trump has angrily accused Powell of holding back the economy, calling the man he nominated in his first term "stupid" and a "loser." The president struck a more conciliatory tone later Thursday, telling reporters they'd had a "productive talk" on the economy, with "no tension." "It may be a little too late, as the expression goes, but I believe he's going to do the right thing," Trump said. Soaring costs for the Fed's facelift of its 88-year-old Washington headquarters and a neighboring building — up by $600 million from an initial $1.9 billion estimate — have caught Trump's eye. A significant driver of the cost is security, including blast-resistant windows and measures to prevent the building from collapsing in the event of an explosion. The Federal Reserve, the world's most important central bank, makes independent monetary policy decisions and its board members typically serve under both Republican and Democratic presidents. Experts question whether Trump has the authority to fire Powell, especially since a Supreme Court opinion in May that allowed the president to remove other independent agency members but suggested that this did not apply to the Fed.
