Following a recent spike, oil prices declined as traders took in fresh information regarding U.S. tariffs and an unanticipated OPEC+ supply rise. West Texas Intermediate (WTI) fell below $68 and Brent crude fell below $69 per barrel as investors reevaluated the trade-off between growing supply and pessimism about global growth.
President Trump raised concerns that the additional economic hardship would reduce fuel demand when he indicated that higher tariffs on major trading partners will go into effect around August 1. Markets are wary of possible ripple effects on the world economy and oil demand, even though the specifics are still up in the air.
Regarding supplies, OPEC+ decided to increase production by 548,000 barrels per day in August, which is more than prior monthly increases. Although Saudi Arabia is bearing the majority of this rise, it marks a change as the group starts to remove almost all voluntary production.
Demand is resilient, though, as domestic gasoline usage in the US is still high due to a busy travel season, and in June, Indian consumption increased by about 1.9% year over year. Analysts point out that, despite the general caution, short-term demand strength may act as a buffer for pricing, maintaining market equilibrium in the face of conflicting forces.
