Crude oil prices fell for a third straight session on Tuesday as concerns over escalating trade disputes between the United States and the European Union weighed on the global economic outlook, threatening to suppress fuel demand.
As of Tuesday morning, Brent crude futures had declined by 49 cents to $68.72 per barrel, a 0.7% drop. U.S. West Texas Intermediate (WTI) crude futures were down 60 cents to $66.60 per barrel, representing a 0.9% decrease.
The August WTI contract was due to expire the same day, with the more active September contract falling by 47 cents to $65.48 per barrel.
“Oil prices fell for a third straight session … as urgency builds in trade negotiations between the U.S. and its partners,” Reuters quoted Soojin Kim, an analyst at MUFG.
The Trump administration has reportedly issued an ultimatum for countries to finalise trade deals by August 1 or face a 30% tariff on exports to the U.S. In response, EU officials are exploring a range of retaliatory measures as negotiations stall.
Though a weaker U.S. dollar offered some support by making crude cheaper in other currencies, it wasn’t enough to offset the drag from trade concerns.
“Prices have slipped as trade war concerns offset the support by a softer (U.S. dollar),” IG analyst Tony Sycamore said in a client note.
PVM Oil analyst John Evans added that strong performance in distillates, fueled by tight inventories, helped limit further losses in crude. “The move lower might have seen more momentum if it were not for the continued performance in distillates, which continues to be aided by low stocks,” he explained.
Meanwhile, a Reuters survey of analysts indicated that U.S. crude inventories likely dropped by around 600,000 barrels for the week ending July 18.
