Oil prices continued to decline on Friday and were set for their steepest weekly losses since late June, as concerns over the impact of Thursday’s tariffs on the global economy and oil demand continued to rise.
As of 5:32 GMT, Brent crude futures dipped 0.14 percent to $66.34 a barrel, while U.S. West Texas Intermediate crude declined 0.22 percent to $63.74 a barrel. Brent was on track to decline more than 4 percent week-over-week, while WTI was set to fall more than 5 percent weekly.
Higher U.S. tariffs raise demand fears
Higher U.S. tariffs against a wide range of trade partners took effect on Thursday, fueling concerns over weaker global economic activity and a potential hit to crude oil demand. Oil prices were already under pressure following the OPEC+ decision last weekend to fully unwind its largest tranche of output cuts in September, several months ahead of schedule.
By Thursday’s close, WTI futures had fallen for six straight sessions, matching a losing streak last seen in December 2023. A lower close on Friday would mark the longest run of declines since August 2021.
Further adding to the downward pressure on oil prices, the Kremlin confirmed on Thursday that Russian President Vladimir Putin would meet with U.S. President Donald Trump in the coming days, a development that raised market expectations of a potential diplomatic resolution to the war in Ukraine.
Additional U.S. tariffs on India over its purchases of Russian crude helped limit the slide in oil prices to some extent, although the measures are unlikely to materially curb the flow of Russian oil to global markets, analysts noted. Trump on Wednesday also warned that China — the largest buyer of Russian crude — could face tariffs similar to those imposed on Indian imports.
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Strong U.S. demand limits losses
This week, oil prices found support from a larger-than-expected drop in U.S. crude inventories. According to the Energy Information Administration, U.S. crude stockpiles declined by 3 million barrels to 423.7 million in the week ending August 1, significantly exceeding analysts’ forecast of a 591,000-barrel draw.
U.S. crude inventories declined as exports rose and refinery activity increased, with utilization rates on the Gulf Coast—the nation’s largest refining hub—and the West Coast reaching their highest levels since 2023.
According to JP Morgan analysts, global oil demand averaged 104.7 million barrels per day through August 5, reflecting annual growth of 300,000 barrels per day. However, this figure remains 90,000 barrels per day below the bank’s forecast for the month.
