Latest News

Oil prices rise 1% as US demand remains strong, but macroeconomic uncertainty persists

The oil price rose by 1% on Friday, ending a five-day decline, as the U.S. remained the world's largest oil consumer. However, uncertainty over the macroeconomic effects of U.S. Tariffs limited gains.

Brent crude futures increased 62 cents or 0.9% to $67.51 per barrel at 0342 GMT, while U.S. West Texas intermediate crude rose 68 cents or 1.1% to $65.03 per barrel.

After Donald Trump's comments about the progress of talks with Moscow, both benchmarks fell about 1% on Wednesday to their lowest levels in eight weeks.

A White House official stated on Wednesday that Trump could meet Russian President Vladimir Putin by next week. The U.S. is still preparing secondary sanctions to be imposed, possibly on China, in order to pressure Moscow into ending the war in Ukraine.

The United States is the second largest producer of crude oil in the world.

Oil markets were still supported by a larger-than-expected decline in U.S. crude stocks last week.

Energy Information Administration reported on Wednesday that U.S. crude stockpiles dropped by 3 million barrels, to 423.7 million in the week ending August 1. This was more than analysts expected in a poll which predicted a draw of 591,000 barrels.

The United States crude exports and refinery runs increased, with the West Coast and Gulf Coast reaching their highest levels since 2023.

JP Morgan analysts said that through August 5, global oil demand averaged 104.7 millions barrels per day. This represents an annual increase of 300,000. However, this is 90,000. bpd less than their monthly forecast.

The analysts stated that despite a somewhat soft start for the month, relative our expectations, the high frequency indicators of global oil demand suggest the consumption will improve sequentially in the next few weeks. Jet fuel and petrochemicals are expected to drive this growth.

Price gains were capped by global macroeconomic uncertainties after the U.S. imposed a new set of tariffs against Indian goods.

Trump imposed a 25% additional tariff on Indian products on Wednesday, citing the continued imports from Russia of Indian oil. The new import tax is set to take effect 21 days following August 7.

Priyanka Sahdeva, senior market analyst at Phillip Nova, said that markets have already priced in the downstream effects of the new tariffs (on India) by the U.S. in just three weeks.

Trump said that he would also announce additional tariffs against China, similar to the 25% tariffs announced earlier against India for its purchases of Russian crude oil.

Sachdeva of Phillip Nova said that tariffs will harm the global economic system, and this will affect fuel demand. He added that the markets are overlooking that the impact on the U.S. inflation rate will be greater. (Reporting and editing by Yuka Yap, Trixie Yap)

(source: Reuters)