Oil prices ease as traders assess US tariffs, OPEC+ output hike
ADVERTISEMENT Brent crude futures dropped 21 cents at $69.37 a barrel by 0041 GMT. U.S. West Texas Intermediate crude fell 24 cents at $67.69 a barrel.
U.S. President Donald Trump on Monday began telling trade partners, which included major suppliers South Korea and Japan as well as smaller U.S. exporters like Serbia, Thailand and Tunisia, that sharply higher U.S. tariffs will start August 1, marking a new phase in the trade war he launched earlier this year.
Trump's tariffs have prompted uncertainty across the market and concerns they could have a negative effect on the global economy and, consequently, on oil demand. However, there are some signs current demand remains strong, particularly in the U.S., the world's biggest oil consumer, which has supported prices. A record 72.2 million Americans were projected to travel more than 50 miles (80 km) for Fourth of July vacations, data from travel group AAA showed last week. Investors were bullish heading into the holiday period with data from the U.S. Commodity Futures Trading Commission released on Monday showing money managers raised their net-long futures and options positions in crude oil contracts in the week up to July 1.
ADVERTISEMENT Regarding supplies, on Saturday the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to raise production by 548,000 barrels per day in August, exceeding the 411,000-bpd hikes they made for the prior three months. The decision removes nearly all of the 2.2 million-bpd of voluntary cuts and analysts at Goldman Sachs expect OPEC+ to announce a final 550,000-bpd increase for September at the next meeting on August 3.
ADVERTISEMENT However, the actual output increase has been smaller than the announced levels so far and most of the supply has been from Saudi Arabia, analysts said.
(You can now subscribe to our ETMarkets WhatsApp channel)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
2 hours ago
- The Hindu
EU says it still wants U.S. trade deal, will defend interests
The European Union said on Saturday (July 12, 2025) it was ready to retaliate to defend its interests if the United States pressed ahead with imposing a 30% tariff on European goods from August 1. U.S. President Donald Trump latest salvo surprised the bloc, the United States' largest trading partner, which had hoped to avoid an escalating trade war after intense negotiations and increasingly warm words from the White House. Ursula von der Leyen, head of the EU executive which handles trade policy for the 27 member states, said the bloc was ready to keep working towards an agreement before August 1, but was willing to stand firm. "We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required," she said of possible retaliatory tariffs on U.S. goods entering Europe. EU ambassadors will discuss next steps on Sunday, before trade ministers meet in Brussels on Monday for an extraordinary meeting. They will need to decide whether to impose tariffs on 21 billion euros of U.S. imports in retaliation against separate U.S. tariffs against steel and aluminium, or extend a suspension which lasts until the end of Monday. The EU has so far held back from retaliating against the U.S., although it has readied two packages that could hit a combined 93 billion euros of U.S. goods European capitals swiftly backed von der Leyen's position. German Economy Minister Katherina Reiche called for a "pragmatic outcome to the negotiations". Trump's proposed tariffs "would hit European exporting companies hard. At the same time, they would also have a strong impact on the economy and consumers on the other side of the Atlantic," she said. French President Emmanuel Macron said on X that the European Commission needed more than ever to "assert the Union's determination to defend European interests resolutely". Retaliation might need to include so-called anti-coercion instruments if Trump did not back down, Macron said. The tool, drawn up during Trump's first term and used against China, allows the EU to go beyond traditional tariffs on goods and impose restrictions on trade in services, if it deems that a country is using tariffs to force a change in policy. Spain's Economy Ministry backed further negotiations but added that Spain and others in the EU were ready to take "proportionate countermeasures if necessary". Trump has periodically railed against the European Union, saying in February it was "formed to screw the United States". His biggest grievance is the U.S. merchandise trade deficit with the EU, which in 2024 amounted to $235 billion, according to U.S. Census Bureau data. The EU has repeatedly pointed to a U.S. surplus in services, arguing it in part redresses the balance. Retaliation Combining goods, services and investment, the EU and the United States are each other's largest trading partners by far. The American Chamber of Commerce to the EU said in March the trade dispute could jeopardise $9.5 trillion of business in the world's most important commercial relationship. Bernd Lange, head of the European Parliament's trade committee said he was now convinced the first stage of countermeasures should come into force on Monday, followed quickly by the second package. Trump has said he would mirror any retaliatory moves. Still, Trump has repeatedly announced sweeping tariffs in recent months, only to row back or suspend them before his own self-imposed deadlines. The expectation that he will again relent has led to increasingly muted responses on financial markets, which have recovered since plunging after his initial "Liberation Day" announcement of big global tariffs in April. Three EU officials who spoke on condition on anonymity said they saw Trump's latest threats as a negotiating ploy. Carsten Brzeski, global head of macro at ING, said Trump's move suggested that months of negotiations remained deadlocked and that the situation was inching towards a make-or-break moment for the transatlantic trade relationship. "The EU will now have to decide whether to budge or to play hardball," he said. "This will bring market volatility and even more uncertainty." Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the brunt of the U.S. tariffs, if implemented, would be felt by U.S. consumers. However, there would also be clear repercussions for the euro area economy, already struggling with weak growth. The European Central Bank had used a 10% tariff on EU exports to the United States as the baseline in its latest economic projections, which put output growth in the euro area at 0.9% this year, 1.1% in 2026 and 1.3% in 2027. It said a 20% U.S. tariff would curb growth by 1 percentage point over the same period and also pull down inflation to 1.8% in 2027, from 2.0% in the baseline scenario. It did not even offer an estimate for the possibility of a 30% tariff.
Mint
5 hours ago
- Mint
Mexico Sure It Will Strike Deal With US to Skirt Tariffs
Mexico is projecting confidence that it will fend off a new set of 30% tariffs that President Donald Trump has threatened to impose on the Latin American country starting on Aug. 1. Mexican President Claudia Sheinbaum said in a speech in the border state of Sonora that every country was getting a letter from Trump. She said her team had already begun discussions with the US on Friday and was confident Mexico would get a deal. 'We believe, based on what our colleagues discussed yesterday, that we will reach an agreement with the United States government and that, of course, we will achieve better conditions,' she said, repeating her refrain about how it's best to keep a cool head. Mexico and the US established a new binational working group on Friday to address security, migration and economic issues, according to a statement posted on Saturday by Mexican Economy Minister Marcelo Ebrard on X. The first major task of the group will be to find an alternative to the tariffs and 'protect jobs on both sides of the border,' the statement read. 'We told the group that this treatment is unfair and that we're not in agreement,' read the statement, jointly signed by the Economy and the Foreign Affairs ministries. Trump published his latest tariff threats early Saturday, saying Mexico would be subject to the 30% rate for not doing enough to fight fentanyl trafficking, even though the country has made strides in helping secure the border with the US. The U.S. doesn't intend to apply the 30% rate to USMCA-compliant goods, according to a White House official. The situation remains fluid, the official cautioned. The administration has previously said it will keep the exemption for Canada. Continuing the exclusion for both Mexico and Canada narrows the scope of Trump's continental tariffs and would be a lifeline to sectors like the auto industry that rely heavily on the USMCA pact, which was renegotiated under Trump's first term. The US president said the 30% tariffs are separate from sectoral ones and could be raised if Mexico retaliates. 'Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground,' Trump wrote. 'If Mexico is successful in challenging the Cartels and stopping the flow of Fentanyl, we will consider an adjustment to this letter.' He said Mexico has many other non-tariff trade barriers that have created an 'unsustainable' trade deficit with the US. With assistance from Josh Wingrove. This article was generated from an automated news agency feed without modifications to text.
India.com
5 hours ago
- India.com
Trump slaps 30 pc tariffs on EU, Mexico starting August 1
New Delhi: US President Donald Trump on Saturday issued 30 per cent tariffs on imports from Mexico and the European Union (EU), to renegotiate trade terms before the August 1 deadline. The European Union will allow complete, open Market Access to the United States, Trump said in its letter posted on Truth Social, or 'whatever the number you choose to raise them by, will be added on the 30 per cent that we charge.' The 27-country EU bloc is under pressures as Germany urged a quick deal to safeguard its industry. In his letter to Mexico, Trump said the country has been 'helping me secure the border,' but added that it wasn't enough. 'Mexico still has not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground. Obviously I cannot let that happen!' Trump said in the letter to Mexican President Claudia Sheinbaum. Earlier, the US President advised countries in ongoing trade talks with his administration to 'just keep working hard' ahead of the August 1 negotiation deadline, repeating his claim that America has been taken advantage of by 'both friend and foe' for many years. Trump made the remarks before departing for a flood-ravaged area in Texas, as South Korea, Japan and other countries strive to reach deals with the United States to avoid or minimize the impact of steep 'reciprocal' tariffs that are set to take effect on August 1. 'I think just keep working hard. You know, we've been taken advantage of for many, many years by countries, both friend and foe. And frankly, the friends have been worse than the foes in many cases,' he said during a press availability at the White House. On Monday, Trump sent a letter addressed to South Korean President Lee Jae Myung, saying that the U.S. will start imposing 25 per cent tariffs on South Korean products on August 1 — rather than Wednesday, when the reciprocal tariffs were initially set to take effect following a 90-day pause.
