Oil Prices Slightly Decline as Investors Monitor Implications of US Trade Decisions
Oil prices witnessed a limited decline during trading on Wednesday, July 9, after reaching their highest levels in two weeks during the previous session, as investors monitored developments related to US customs duties and their potential impacts on global markets.
Price Decrease
Data showed a 0.1% decrease in Brent crude futures, settling at $70.05 per barrel, while WTI crude futures declined by a similar percentage to reach $68.22 per barrel.
Tariff Delay Sparks Optimism and Confusion
This decline coincided with US President Donald Trump's decision to postpone the implementation of new customs duties from today to August 1, allowing major trading partners such as Japan, South Korea, and the European Union to negotiate easing these measures. However, the decision caused confusion among some smaller exporting countries, like South Africa, leaving many companies uncertain about the future of global trade.
Expansion of Trade War
Trump also announced plans to impose a 50% tariff on copper imports, in addition to new tariffs soon on semiconductors and pharmaceuticals, further expanding the trade war that has affected market stability.
Supportive Factors for Oil Demand
Despite concerns about the impact of customs duties on global oil demand, strong expectations for increased travel demand during the Fourth of July holiday supported market sentiment. Data released by the AAA Travel Group last week indicated that about 72.2 million Americans _a record number_ will travel more than 50 miles during the holiday.
Revised US Production Forecasts
On the other hand, the US Energy Information Administration lowered its oil production forecasts for 2025 in its monthly report released on Tuesday, expecting production to reach 13.37 million barrels per day, compared to a previous estimate of 13.42 million barrels. It also forecasted production to remain at the same level in 2026.
Expected Increases from OPEC+
Conversely, the OPEC+ alliance is expected to approve a significant new production increase for September, after agreeing to a 548,000 barrels per day increase for August. However, analysts noted that actual production increases so far have been less than announced, with Saudi Arabia being the main source of additional supplies.
Geopolitical Tensions Support Prices
In a related context, tensions in the region continued after the shipping vessel "Eternity C" flying the Liberian flag was attacked by a drone and a fast boat off the coast of Yemen, resulting in the deaths of four sailors, according to an informed source. This incident marks the second of its kind in one day, following months of relative calm in the region.
