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On Tuesday, oil prices saw a decline following a nearly 2 percent increase the previous day, as market participants evaluated recent updates concerning US tariffs and an unexpectedly large production increase from OPEC+ for August.
Brent crude futures slipped by 21 cents, settling at $69.37 per barrel by 0041 GMT, while US West Texas Intermediate crude dipped 24 cents to $67.69 per barrel.
On Monday, US President Donald Trump informed trade partners—including significant suppliers like South Korea and Japan, as well as smaller US exporters such as Serbia, Thailand, and Tunisia—that steep increases in US tariffs will take effect from August 1. This marks a new stage in the trade conflict he initiated earlier this year.
Trump’s imposed tariffs have created uncertainty in the markets and raised concerns about a potential adverse impact on the global economy, which could ultimately affect oil demand.
Nonetheless, there are indications that demand remains robust, particularly in the US, which is the largest consumer of oil globally, thus supporting prices. Data from the travel group AAA released last week suggested that a record 72.2 million Americans are expected to travel over 50 miles (80 km) for the Fourth of July holiday.
As the holiday approached, investors were optimistic; data from the US Commodity Futures Trading Commission published on Monday revealed that money managers increased their net-long positions in crude oil futures and options for the week ending July 1.
In terms of supplies, OPEC and its allies, collectively known as OPEC+, reached an agreement on Saturday to boost production by 548,000 barrels per day in August, surpassing the earlier increases of 411,000 barrels per day that were implemented over the preceding three months.
This decision effectively reverses most of the 2.2 million barrels per day of voluntary cuts, and analysts from Goldman Sachs predict that OPEC+ will finalize a further increase of 550,000 barrels per day for September during their next meeting scheduled for August 3.
However, analysts noted that the actual production increase has been less than what was announced, with the majority of the supply increase attributed to Saudi Arabia.