Oil prices dip after hitting two-week highs as investors assess US tariff impact

SINGAPORE: Oil prices slipped slightly on Wednesday, easing from two-week highs seen in the previous session, as investors kept a close eye on developments around new US tariffs and their potential impact on global trade.

By 0121 GMT, Brent crude futures had fallen 20 cents, or 0.3 per cent, to $69.95 a barrel. US West Texas Intermediate (WTI) crude was down 21 cents, or 0.4 per cent, at $68.12.

The dip followed mixed signals from US President Donald Trump, who delayed a planned tariff hike until August 1, a date he called final, insisting “no extensions will be granted.” While the delay offered some hope for trade partners such as Japan, South Korea and the European Union, it left other exporters, like South Africa, uncertain about what to expect.

Trump also announced plans to impose a 50 per cent tariff on imported copper and signalled upcoming duties on semiconductors and pharmaceuticals, further escalating trade tensions that have unsettled global markets.

Despite concerns that the widening trade dispute could hurt oil demand, strong US travel forecasts helped ease some of the market’s anxiety. Travel group AAA projected a record 72.2 million Americans would journey over 50 miles during the July 4 holiday period.

On the supply front, the US is now expected to produce slightly less oil in 2025 due to lower prices, according to the Energy Information Administration (EIA). The EIA’s latest monthly report revised its 2025 production forecast to 13.37 million barrels per day (bpd), down from 13.42 million bpd projected earlier. The 2026 output forecast remains unchanged at 13.37 million bpd. 

Meanwhile, OPEC+ producers are preparing to approve another large production increase for September, sources said. This comes after the group already agreed to a 548,000 bpd hike for August, as part of a broader plan to unwind voluntary cuts and raise the UAE’s quota.  

However, analysts noted that actual output increases have so far lagged behind announced targets, with Saudi Arabia contributing the bulk of the additional supply. 

Geopolitical risks also continued to support prices. Four crew members were killed in a drone and speedboat attack on the Liberian-flagged, Greek-operated bulk carrier Eternity C off Yemen, an official confirmed. It was the second such attack reported on the same day after a long period of relative calm in the region. 

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