Oil prices dipped on Wednesday after reaching two-week highs in the previous trading session, as investors looked for new updates regarding U.S. tariffs amid expectations of increasing crude inventories in the United States.
Brent crude futures fell by 7 cents, or 0.1 percent, to $70.08 a barrel. Meanwhile, U.S. West Texas Intermediate crude dropped 8 cents, or 0.1 percent, to $68.25 a barrel.
U.S. President Donald Trump’s recent delay in tariffs offered some optimism to major trading partners like Japan, South Korea, and the European Union, suggesting that agreements to reduce duties might still be achievable. However, this move left smaller exporters, such as South Africa, perplexed and provided little clarity for companies regarding future actions.
Trump postponed Wednesday’s previously set deadline to August 1, a date he had declared final just a day earlier, stating: “No extensions will be granted.” He also announced plans to impose a 50 percent tariff on imported copper and to soon introduce long-anticipated levies on semiconductors and pharmaceuticals, escalating a trade conflict that has unsettled global markets.
Read more: Crude oil prices retreat over 0.3 percent to $69.25 as U.S. tariffs, OPEC+ output weigh
Demand concerns grow
“Investors are constantly dealing with ‘tariffs headlines’ and the potential fallout from their adverse impact on global trade,” reported Reuters, quoting Priyanka Sachdeva, senior market analyst at Phillip Nova. She added, “… Given the backdrop of uncertainty and potential somber economic growth going forward, it’s surprising how the energy complex can still surge with seemingly unending ‘bearish headlines’ mounting pressures persistently.”
Concerns linger that the tariffs could dampen oil demand. Despite robust travel activity during the U.S. holiday weekend on July 4, data from industry sources indicated potential crude inventory increases in the U.S. of around 7.1 million barrels, although stocks of fuel products were lower.
“Numbers from the API overnight were bearish for oil,” stated ING analysts in a client note, noting that “changes in refined products were more constructive.” Official data from the U.S. Energy Information Administration is expected to be released at 14:30 GMT later today.
Looking at the longer-term supply situation, the U.S. is projected to produce less oil in 2025 than previously anticipated, as declining oil prices have led U.S. producers to reduce activity this year. According to a monthly report from the Energy Information Administration, the world’s largest oil producer is expected to generate 13.37 million barrels per day of oil in 2025, down from last month’s forecast of 13.42 million bpd, as stated in its short-term energy outlook report.
