Oil Prices Stabilize Amid Tariff Uncertainty, Heading for Weekly Gains

Current Price Movement:

Brent Crude: Up 19 cents (+0.26%) at $71.89 a barrel
U.S. West Texas Intermediate (WTI): Up 20 cents (+0.29%) at $69.46 a barrel
Weekly Performance: Brent on course for a 5% weekly gain, and WTI for a 6.6% weekly gain.

U.S. Tariffs: Investors have focused on the impact of U.S. President Donald Trump’s tariffs, set to be enforced from August 1. These tariffs range from 10% to 41% on imports from countries like Canada, India, and Taiwan.
Trade Deal Progress: Positive sentiment emerged as some countries secured trade deals, including the European Union, South Korea, Japan, and Britain. This progress has been seen as a key driver for oil price increases this week.

Secondary Tariffs on Russian Crude: Trump threatened 100% secondary tariffs on countries purchasing Russian crude in an attempt to pressure Russia to cease its war on Ukraine.
- Impact: This raised concerns over oil supply disruptions, particularly on Russian seaborne oil exports. Analysts at JP Morgan highlighted that China and India, the second- and third-largest crude consumers, may risk 2.75 million barrels per day of Russian oil exports.

While the tariffs have supported oil prices this week, there are concerns about economic growth. Rising tariffs could increase the cost of goods, leading to higher inflation, which might reduce demand for oil.
Inflation Data: Inflation figures from June showed that existing tariffs may already be pushing prices higher in the U.S., which could impact demand for oil as the world’s largest oil consumer.

Investors are closely monitoring trade developments, with further progress on trade talks between the U.S. and China potentially offering additional support to oil prices.
However, concerns over economic growth and the potential economic drag from tariffs remain, making the future trajectory of oil prices uncertain.

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