Oil prices down. Market under pressure from Trump tariffs
Brent crude oil fell by $0.28 during Thursday's session, to $68.83 per barrel. American WTI crude oil fell by $0.40, reaching $67.05. Trading was limited in the market due to the approaching Independence Day in the United States.
Trade uncertainty still weighs on marketsThe main source of concern is the approaching end of a 90-day suspension of new import tariffs that President Donald Trump announced earlier this year. That period expires on July 9, and the U.S. has yet to strike new trade deals with countries including the European Union and Japan. While a preliminary agreement with Vietnam lifted sentiment on Wednesday, general uncertainty about the future course of U.S. tariff policy still weighs on the market.
The expected decision by OPEC+ to increase oil production by 411 thousand barrels per day is also having a negative impact on the prices. In the background, there are also signals of weakening demand from China – the world's largest importer of the raw material. The June reading of activity in the services sector in this country was the lowest in nine months, and export orders fell significantly.
Rising US oil inventories worries investorsAnother concern is the unexpected rise in U.S. crude inventories. Last week, inventories rose by 3.8 million barrels, according to the U.S. Energy Information Administration, while analysts were expecting a decline of 1.8 million. At the same time, the number of active drilling rigs in the U.S. fell to 425, the lowest since September 2021, which could indicate a projected reduction in production in the future.
Although US employment data was better than expected – unemployment fell and the number of new jobs rose – almost half of the new jobs were generated by the public sector. Meanwhile, private sector growth slowed, which experts attribute to the negative impact of the Trump administration’s tariff policy on industry and retail trade.
Earlier on Wednesday, oil prices briefly rose after reports that Iran had suspended cooperation with the International Atomic Energy Agency, reigniting fears of an escalation over Tehran’s nuclear program. On Thursday, the U.S. imposed new sanctions on both Iran and networks linked to Hezbollah.
