Oil prices edged down on Wednesday after rising to two-week highs in the previous session, as investors awaited new developments on U.S. tariffs amid expectations of rising crude inventories in the United States.
Brent crude futures slipped 7 cents, or 0.1%, at $70.08 a barrel by 0400 GMT. U.S. West Texas Intermediate crude fell 8 cents, or 0.1%, to $68.25 a barrel.
U.S. President Donald Trump’s latest tariff delay provided some hope to major trade partners Japan, South Korea and the European Union that deals to ease duties could still be reached, while bewildering some smaller exporters such as South Africa and leaving companies with no clarity on the path forward.
Trump pushed back Wednesday’s previous deadline to August 1, a date he said on Tuesday was final, declaring: “No extensions will be granted.”
Trump added that he would impose a 50% tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening a trade war that has rattled markets worldwide.
“Investors are constantly dealing with ‘tariffs headlines’ and the potential fallout from their adverse impact on global trade,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“… Given the backdrop of uncertainty and potential sombre economic growth going forward, it’s surprising how the energy complex can still surge with seemingly unending ‘bearish headlines’ mounting pressures persistently,” she added.
There is concern that the tariffs could curb demand for oil, and while there was strong travel demand during the U.S. holiday weekend on July 4, data from industry sources showed possible crude inventory builds in the U.S. of around 7.1 million barrels, though fuel products’ stocks were lower.
“Numbers from the API overnight were bearish for oil,” said ING analysts in a client note, adding that “changes in refined products were more constructive”.
Official data from U.S. Energy Information Administration is scheduled to be out at 1430 GMT later today.
On the longer term supply side, the U.S. will produce less oil in 2025 than previously expected as declining oil prices have prompted U.S. producers to slow activity this year, the Energy Information Administration forecast on Tuesday in a monthly report.
The world’s largest oil producer is projected to produce 13.37 million barrels per day of oil in 2025, versus last month’s forecast of 13.42 million bpd, the EIA said in its short-term energy outlook report.
(Reporting by Arathy Somasekhar; Editing by Muralikumar Anantharaman and Kate Mayberry)