Oil prices fell on Friday, heading for their steepest weekly losses since late June as the latest round of U.S. tariffs weighed on the economic outlook and likely upcoming Trump-Putin talks raised the prospect of an ease in sanctions on Russia.
Brent crude futures were down 51 cents to $65.92 a barrel at 0630 GMT, on track to decline more than 4% week-over-week. U.S. West Texas Intermediate crude futures were down 57 cents, or 0.89%, to $63.31 a barrel, set to fall nearly 6% on a weekly basis.
Higher U.S. tariffs against a host of trade partners went into effect on Thursday. The tariffs raised concerns of weaker economic activity, which would hit demand for crude oil, ANZ Bank analysts said in a note, and came against the backdrop of an already weaker-than-expected U.S. labour market.
A Kremlin announcement on Thursday that Vladimir Putin and Donald Trump would meet in the coming days meanwhile raised expectations of a diplomatic end to the war in Ukraine. That is widely expected to result in eased sanctions on Russia, which could unleash more barrels onto an oversupplied market.
Trump earlier this week had threatened to hike tariffs on India if it kept buying Russian oil, which the market viewed as putting further pressure on Russia to reach a deal with the U.S., independent market analyst Tina Teng told Reuters.
Trump on Wednesday also said China, the largest buyer of Russian crude oil, could be hit with tariffs similar to those being levied against Indian imports.
Oil prices were already reeling from the OPEC+ group’s decision last weekend to fully unwind its largest tranche of output cuts in September, months ahead of target.
At Thursday’s close, WTI futures had dropped for six consecutive sessions, matching a declining streak last recorded in December 2023. If prices settle lower on Friday, it will be the longest streak since August 2021.
(Reporting by Shariq Khan in New York and Colleen Howe in Beijing; Editing by Tom Hogue)