Markets take a breather as investors ponder potential oil price impacts from Trump's proposed tariffs and increased US oil inventories.
In a volatile week for the global oil market, both US West Texas Intermediate (WTI) and Brent crude saw declines on Thursday. WTI fell 68 cents, or 0.97 percent, to $69.32, while Brent crude dropped by 61 cents, or 0.83 percent, to $72.63 per barrel.
The US Energy Information Administration (EIA) reported a rise in US crude oil inventories by 7.7 million barrels to 426.7 million barrels in the week ending July 25. Lower exports were the reason for the increase. Contrastingly, US gasoline stocks fell by 2.7 million barrels to 228.4 million barrels, a decrease that far exceeded analysts' expectations.
The decrease in US gasoline stocks, according to Toshitaka Tazawa, an analyst at Fujitomi Securities, supports the view of strong driving season demand. Analysts had expected a draw of 600,000 barrels for US gasoline stocks, but the actual decrease was much larger.
Despite the surprise build in crude stocks and the bigger-than-expected gasoline draw, the overall impact on the oil market from the US inventory data was neutral, as stated by Toshitaka Tazawa.
The US has also been putting pressure on major oil buyers, particularly China, the largest buyer of Russian oil. The US warned China that it could face huge tariffs if it continued buying Russian oil. However, without specific data or reports linking these recent tariff announcements by Trump to changes in oil prices, it is not possible to confirm or quantify the impact directly.
The global oil market is also grappling with the repercussions of Trump's announcement of measures on Russia, including 100 percent secondary tariffs on its trading partners, if it does not make progress on ending the war in Ukraine within 10-12 days. This announcement moved up an earlier 50-day deadline set by Trump.
The statements from Harry Tchiliguirian at Onyx Capital Group suggest a re-evaluation of the market until there is more clarity about the situation with Russia and the war in Ukraine. Harry Tchiliguirian stated that the market is front-running the implications of President Trump's announcements about tariffs on Russia.
Additionally, the US Treasury Department announced fresh sanctions on more than 115 Iran-linked individuals, entities, and vessels on Wednesday. While these sanctions are not directly related to oil prices, they add to the overall uncertainty in the global energy market.
In summary, a mix of factors, including US inventory data, geopolitical tensions, and tariff threats, are influencing the current state of the global oil market. For the most reliable conclusion, it is recommended to consult real-time financial market analyses or energy market reports for the latest correlations between these events and oil price fluctuations.
- The unexpected build in US crude oil inventories and the larger-than-expected gasoline draw might have little impact on the oil market, according to Toshitaka Tazawa, an analyst at Fujitomi Securities.
- The global oil market is facing uncertainties due to geopolitical tensions, particularly the repercussions of Trump's announcements regarding measures on Russia, including the potential for 100 percent secondary tariffs on its trading partners.
- In the midst of these market fluctuations, the US Treasury Department announced fresh sanctions on more than 115 Iran-linked individuals, entities, and vessels, further adding to the uncertainties in the global energy market.
- Despite the US putting pressure on major oil buyers, such as China, to cut down on Russian oil imports, the direct impact on oil prices remains unclear without specific data or reports linking these tariff announcements to changes in oil prices.
