Oil prices slip as markets weigh US tariffs and OPEC+ output hike 

SINGAPORE: Oil prices edged lower on Tuesday after rising nearly 2 per cent the previous day, as investors responded to new developments on US trade tariffs and an unexpected increase in planned oil production by OPEC+ for August. 

By 0330 GMT, Brent crude futures were down 22 cents at $69.36 a barrel, while US West Texas Intermediate (WTI) crude slipped 27 cents to $67.66 a barrel. 

The dip followed comments by US President Donald Trump, who said on Monday that higher tariffs would be imposed on several trade partners starting August 1.  

Countries affected include major oil suppliers such as South Korea and Japan, as well as smaller exporters like Serbia, Thailand, and Tunisia. However, Trump also hinted the deadline was not final, adding to uncertainty in the markets. 

The announcement raised fresh concerns over the global economic outlook and the impact on oil demand, which is closely tied to economic activity. 

Despite these concerns, signs of strong current demand have helped cushion the price drop. In the US, the world’s largest oil consumer, travel activity surged ahead of the Fourth of July holiday. According to travel association AAA, a record 72.2 million Americans were expected to travel at least 50 miles during the period. 

Investor sentiment also remained upbeat in the run-up to the holiday. Data from the US Commodity Futures Trading Commission showed that money managers increased their net-long positions in crude oil contracts for the week ending July 1, indicating expectations of continued demand. 

“Prompt demand remains healthy due to seasonal factors. The real question is whether future demand will be strong enough to absorb the higher-than-expected supply from OPEC+,” said Emril Jamil, senior analyst at LSEG Oil Research. 

India, the world’s third-largest oil consumer, also reported a 1.9 per cent year-on-year rise in fuel consumption in June, reflecting steady demand. 

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