DTN Oil Update
Oil Futures Fall on Tariffs Concerns, OPEC+ Output Hike
HOUSTON (DTN) -- Oil futures settled lower on Tuesday amid expectations of a global oil demand slowdown, driven by trade tensions between the U.S. and some of its trading partners, as the deadline to impose tariffs starting Aug. 1 approaches.
The front-month NYMEX WTI futures contract declined by $0.99 to $66.213 bbl, while September ICE Brent futures contract decreased by $0.40 to $68.81 bbl.
August RBOB gasoline futures dropped by $0.0267 to $2,1052 gallon, while the front-month ULSD futures contract reversed gains from the previous trading session, falling by $0.0549 to $2.4543 gallon.
The U.S. dollar dropped by 0.440 points to 97.130 against a basket of foreign currencies.
Over the weekend, Commerce Secretary Howard Lutnick stated that Aug. 1 is a "hard deadline" for countries to begin paying tariffs to the United States. Trading partners, including the EU and Mexico, have been threatened with a 30% trade tariff starting on the first day of August. In April, the Trump administration announced a 90-day pause on most U.S. tariffs, to give countries an opportunity to negotiate deals and avoid steeper trade tariffs.
Experts anticipate that potential sanctions on U.S. trading partners could affect global oil consumption and the U.S. economy by adding inflationary pressures and weakening the currency.
Expectations for a larger-than-expected oil production from OPEC+ in August also contributed to the bearish tone in the oil futures market. Early this month, the eight countries comprising OPEC+ agreed to add 548,000 bpd starting in August. This increase is in addition to the 411,000-bpd announced by the oil group for May, June and July.
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