Oil prices fall as US tariff deadline approaches

Oil prices fell for a third consecutive session on Tuesday amid fears that a brewing trade war between major oil consumers, the US and the EU, would curb fuel demand growth due to slowing economic activity, UNN reports with reference to Reuters.

DetailsBrent crude futures fell 49 cents, or 0.7%, to $68.72 a barrel at 09:15 GMT (12:15 Kyiv time). US West Texas Intermediate crude futures traded down 60 cents, or 0.9%, to $66.60 a barrel.

The August WTI crude contract expires on Tuesday, while the more active September contract fell 47 cents, or 0.7%, to $65.48 a barrel.

“Oil prices are falling for a third consecutive session… amid increasing acuteness of trade negotiations between the US and its partners,” said Sujin Kim, an analyst at MUFG Bank, in her note.

The Trump administration set August 1 as the deadline for countries to conclude trade agreements, otherwise they face high tariffs.

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According to EU diplomats, the European Union is exploring a wider range of possible countermeasures against the United States, as the prospects for an acceptable trade agreement with Washington become less attractive.

The US threatened to impose a 30% tariff on imports from the EU if no agreement is reached.

A weaker dollar somewhat limited oil price losses, as buyers using other currencies paid relatively less.

Prices fell, “as trade war fears offset support from a weaker (US dollar),” IG market analyst Tony Sycamore wrote in a post.

Higher distillate margins due to low inventories also support oil prices.

“The decline could have had more momentum if not for the continued rise in distillate prices, which continues to be supported by low inventories,” PVM Oil analyst John Evans said in a note.

Meanwhile, a Reuters poll of analysts showed that US crude inventories likely fell by about 600,000 barrels in the week to July 18.