Oil prices fell for a third consecutive day amid concerns about an escalating trade war between the United States and the European Union. Fears that trade disputes could slow economic activity and negatively impact fuel demand shook markets. Brent crude oil fell 49 cents (0.7 percent) to $68.72 a barrel, while US West Texas crude lost 60 cents (0.9 percent) to trade at $66.60. The August WTI contract expired today, while the September contract fell 47 cents (0.7 percent) to $65.48. down.
MUFG bank analyst Soojin Kim said, “Oil prices fell for the third day… Urgency is increasing in trade negotiations between the U.S. and its allies.”
The Trump administration had announced that countries had to reach trade agreements by August 1, otherwise they would face high tariffs.
The European Union is considering broader countermeasures against the U.S. as the likelihood of an acceptable trade agreement with Washington diminishes.
According to EU diplomats, the US is threatening to impose 30% tariffs on imports from the European Union if no deal is reached.The weakening dollar has limited losses, allowing buyers using other currencies to purchase oil at lower prices.
IG market analyst Tony Sycamore said, “Concerns about the trade war have offset the support of the weak dollar.”
Strong performance in distillate profit margins due to low inventory levels is also supporting crude oil prices.
PVM Oil analystJohn Evans commented, “If it weren’t for the strong performance in distillates, the decline in prices could have gained more momentum.”
