Oil prices steady after losses, weighed by tariff threats and OPEC outlook
&imwidth=600&imheight=450&format=webp&quality=medium "Oil prices steady after losses, weighed by tariff threats and OPEC outlook")
Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. Photograph: (Reuters)
Analysts believe that tariffs remain a potential drag on the market and could undermine industrial activity and travel, both key drivers of oil demand.
Oil prices held steady in early trading on July 11, after falling more than 2 per cent in the previous session. Markets are grappling with the impact of President Donald Trump's new tariff announcements and a downward revision of global oil demand by OPEC, raising concerns over future economic growth and oil consumption. Brent crude futures rose by 19 cents, or 0.28 per cent, to $68.83 a barrel, while US West Texas Intermediate (WTI) crude ticked up 26 cents, or 0.39 per cent, to $66.83 a barrel as of 0037 GMT.
Trump’s announcement on July 10 that the US would impose a 35 per cent tariff on goods from Canada starting August 1, alongside plans for blanket tariffs of 15-20 per cent on most other trade partners, spooked markets. Investors are wary that these tariffs will dampen global economic growth, disrupting trade and driving up costs, which in turn could weaken demand for oil.
Analysts believe that tariffs remain a potential drag on the market and could undermine industrial activity and travel, both key drivers of oil demand. Earlier in the day, President Trump also laid out plans for tariffs on imports from countries like Brazil, alongside duties on copper, semiconductors, and pharmaceuticals, signalling more tension in international trade.
OPEC+ cuts forecasts and supply outlook
The latest concerns also stem from OPEC’s revised outlook on oil demand. On July 10, the Organization of the Petroleum Exporting Countries (OPEC) lowered its global oil demand forecast for 2026-2029, citing weaker economic growth, particularly in China. OPEC now expects global oil demand to average 106.3 million barrels per day (bpd) in 2026, down from its previous forecast of 108 million bpd.
While OPEC and its allies (OPEC+) are planning to increase production by 550,000 barrels per day in August, reports suggest that the group may pause further production increases after September due to concerns about oversupply later in the year. This could result in a better-supplied market in the short term, but analysts believe the market could face surplus conditions by the fourth quarter.
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The combination of rising tariffs and OPEC’s reduced demand forecast has created a sense of uncertainty in the market, which is still digesting these developments. However, signs of tightness in the physical oil market and seasonal demand peaks during the Northern Hemisphere summer are providing some support to prices in the near term. As global markets continue to navigate these factors, oil prices are likely to remain volatile, with further fluctuations expected depending on developments in trade policies and OPEC’s production decisions.