Economy
Crude Oil Declines Marginally Amid Trade Deal Development
By Adedapo Adesanya
Crude oil slightly depreciated on Wednesday as investors assessed trade developments between the European Union and the US after President Donald Trump reached a tariff deal with Japan.
Brent crude lost 8 cents or 0.12 per cent to settle at $68.51 a barrel and the US West Texas Intermediate (WTI) crude declined by 6 cents or 0.09 per cent to close at $65.25 per barrel.
European Union officials said they were heading towards a trade deal with the US that would result in a broad 15 per cent tariff on EU goods imported into the US, avoiding a harsher 30 per cent levy slated to be implemented from August 1.
EU member states were set to vote on 93 billion Euros of counter-tariffs on US goods on Thursday, European diplomats said while a broad majority of members support using anti-coercion instruments if there is no deal.
President Trump said the US and Japan had struck a trade deal that lowers tariffs on auto imports and spares Japan from punishing new levies on other goods in exchange for a $550 billion package of US-bound investment and loans.
Meanwhile, governments were scrambling to close trade deals before next week’s deadline that the White House has repeatedly pushed back under pressure from markets and intense lobbying by industry.
US and Chinese officials plan to meet in Sweden next week to discuss extending an August 12 deadline for negotiating a trade deal.
American crude oil inventories fell by 3.169 million barrels in the week ending July 18, the Energy Information Administration (EIA) reported on Wednesday, broadly confirming the earlier American Petroleum Institute (API) estimate but with a steeper decline.
On Tuesday, the API estimated that crude oil inventories in the US fell this week, noting that inventories declined by 577,000 barrels in the week ending July 18.
The EIA also added that US crude exports were up by 337,000 barrels per day to 3.86 million barrels per day, while net US crude imports fell last week by 740,000 barrels per day.
The US will consider sanctioning Russian oil to end the war in Ukraine after the EU last Friday agreed its 18th sanctions package against Russia, lowering the price cap for Russian crude. This is expected to provide a boost for the market.
