By Nicole Jao NEW YORK (Reuters) -Oil prices fell slightly on Thursday as investors worried that U.S. tariffs could slow energy demand ahead of an expected supply boost by major crude producers. Brent crude futures fell 28 cents, or 0.41%, to $68.83 a barrel by 2:18 p.m. EDT (1818 GMT). U.S. West Texas Intermediate crude […]
Business
Oil prices ease on US tariff uncertainty ahead of expected OPEC+ output boost
Audio By Carbonatix
By Nicole Jao
NEW YORK (Reuters) -Oil prices fell slightly on Thursday as investors worried that U.S. tariffs could slow energy demand ahead of an expected supply boost by major crude producers.
Brent crude futures fell 28 cents, or 0.41%, to $68.83 a barrel by 2:18 p.m. EDT (1818 GMT). U.S. West Texas Intermediate crude declined 40 cents, or 0.59%, to $67.05 in trade thinned on the eve of the Independence Day holiday.
President Donald Trump’s 90-day pause on implementation of higher U.S. tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the European Union and Japan. Oil traders are worried about the impact on the economy and fuel demand.
A preliminary trade deal between the U.S. and Vietnam boosted prices on Wednesday, but overall tariff uncertainty looms large.
Also weighing on prices, OPEC+ is expected to agree to raise output by 411,000 barrels per day at its policy meeting this weekend. Also, a private-sector survey showed service activity in China – the world’s biggest oil importer – expanded in June at its slowest pace in nine months as demand weakened and new export orders declined.
In the U.S., a surprise build in crude inventories also highlighted demand concerns in the world’s biggest crude consumer.
The U.S. Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.
U.S. energy firms this week cut the number of oil rigs by seven to 425, their lowest since September 2021, energy services firm Baker Hughes said in its closely followed report on Thursday. Oil rig count is an indicator of future output.
U.S. job growth was solid in June while unemployment rates fell unexpectedly, data showed on Thursday. However, nearly half of the increase in nonfarm payrolls came from the government sector, with private sector gains slowing considerably as industries like manufacturing and retail grappled with Trump’s aggressive tariffs on imports.
“Thursday’s jobs report was stronger than expected, which shows that the resiliency we have been seeing in the economy over the past several months is still intact. We still expect the Federal Reserve to continue its wait-and-see approach on interest rates,” said David Laut, chief investment officer of Abound Financial.
Both contracts hit one-week highs on Wednesday as oil producer Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns that the lingering dispute over its nuclear programme could again evolve into armed conflict.
Washington imposed new Iran-related sanctions on Thursday as well as sanctions targeting the Hezbollah network, the U.S. Treasury Department website showed.
“For now, the market’s going to take it in stride, because none of these efforts have worked in the past,” said John Kilduff, a partner at Again Capital.
(Reporting by Nicole Jao in New York, Ahmad Ghaddar and Robert Harvey in London; Editing by Barbara Lewis, David Gregorio and Daniel Wallis)