LONDON: Oil slipped about one per cent on Tuesday as rising OPEC+ supply and worries of weaker global demand countered concern about US President Donald Trump‘s threats to India over its Russian oil purchases.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, a move that will end its most recent output cut earlier than planned.
Brent crude futures were down 70 cents, or one per cent, to US$68.06 a barrel at 1052 GMT, while US West Texas Intermediate crude slipped 79 cents, or 1.2 per cent, to US$65.50. Both contracts fell by more than one per cent on Monday to settle at their lowest in a week.
Trump on Monday again threatened higher tariffs on Indian goods over the country’s Russian oil purchases. New Delhi called his attack “unjustified” and vowed to protect its economic interests, deepening a trade rift between the two countries.
Oil’s move since Trump‘s threat indicates that traders are sceptical of a supply disruption happening, said John Evans of oil broker PVM in a report. He questioned whether Trump would risk higher oil prices.
“I’d call it a stable market for oil,” said Giovanni Staunovo, analyst at UBS. “Assume this likely continues until we figure out what the US president announces in respect to Russia later this week and how those buyers would react.”
India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million bpd from January to June this year, up one per cent from a year ago, according to data provided to Reuters by trade sources.
Trump’s threats come amid renewed concerns about oil demand and some analysts expect faltering economic growth in the second half of the year.
JPMorgan said on Tuesday the risk of a US recession was high. Also, China‘s July Politburo meeting signalled no more policy easing, with the focus shifting to structural rebalancing of the world’s second-largest economy, the analysts said.
© New Straits Times Press (M) Bhd
