Oil Prices Decline as Investors Assess Tariffs and Increased Production by OPEC+

Oil prices witnessed a decline today, Tuesday, July 8, after rising by about 2% in the previous session, amid investors' assessment of developments related to American tariffs and the higher-than-expected production increase by the OPEC+ alliance for the month of August.

Brent crude futures fell by 0.4%, reaching $69.29 per barrel, while West Texas Intermediate crude oil dropped by the same percentage to $67.60 per barrel.

This decline followed President Donald Trump's announcement on Monday of imposing high tariffs on trading partners, including key suppliers like South Korea and Japan, and other countries such as Serbia, Thailand, and Tunisia, effective August 1st. This move raised concerns about its negative impact on the global economy, increasing market uncertainty and affecting oil demand expectations.

Nevertheless, oil demand remains strong, especially in the United States, the world's largest oil consumer. Data from the AAA Travel Group last week showed that 72.2 million Americans are expected to travel over 80 kilometers during the Fourth of July holiday, a record number. Data from the Commodity Futures Trading Commission indicated an increase in investor long positions in crude oil contracts during the week ending July 1st.

On the supply side, the OPEC+ alliance agreed last Saturday to increase production by 548,000 barrels per day in August, surpassing the previous increase of 411,000 barrels per day implemented over the past three months. This step marks the end of voluntary cuts amounting to around 2.2 million barrels per day.

Goldman Sachs expects the alliance to announce an additional increase of 550,000 barrels per day for September during their upcoming meeting on August 3rd. However, analysts noted that the actual production increase so far has been less than announced, with most of the additional quantities coming from Saudi Arabia.