LONDON: On Wednesday, oil prices dropped almost 1% as market apprehension over the broader economic effects of US tariffs overshadowed indications of increased Chinese crude demand. Prices have fluctuated sharply as concerns that US tariffs on trade partners will hinder economic development and gasoline consumption have clashed with indications of stable demand from a surge in travel during the summer months in the Northern Hemisphere.
The price of Brent crude futures dropped 62 cents, or 0.9 percent, to $68.09 a barrel by 3:17 p.m. Saudi time. The price of US West Texas Intermediate oil futures dropped 72 cents, or 1.1%, to $65.80.
If negotiations with Washington do not result in a trade agreement, the European Commission is ready to target 72 billion euros ($84.1 billion) worth of US goods for potential penalties. Trump also declared on Monday that if an agreement is not reached to end the war in Ukraine, the United States will slap “very severe tariffs” on Russia within 50 days.
PVM oil analyst Tamas Varga wrote in a note that “oil continued to drift lower yesterday because the latest US salvo toward Russia failed to reignite fears of sustained supply disruption.” Losses were, however, constrained by a better demand forecast from China.
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