Oil held the bulk of a four-day drop as investors largely looked beyond a threat from President Donald Trump to impose secondary tariffs on buyers of Russian energy, while US data pointed to softer conditions in the largest economy.
Brent traded near $68 a barrel after losing almost 8% over four sessions, while West Texas Intermediate was near $65. Trump suggested he would impose increased tariffs on countries buying oil from Moscow — possibly including China — after saying he would soon raise levies on India.
US special envoy Steve Witkoff is expected to travel to Russia this week, ahead of Trump’s Aug. 8 deadline for Moscow to reach a truce with Ukraine. The Kremlin is weighing options for a concession that could include an air truce, even as it remains determined to continue the war.
Oil has edged lower after three months of gains, with a focus on headwinds to growth in the US that may hurt energy demand, as well as a move by OPEC to roll back output curbs. Last weekend, the alliance agreed to raise production from September by about 547,000 barrels a day, boosting concerns that global supplies will run ahead of consumption this half.
“Trump’s rhetoric on Russia sanctions and secondary tariffs is getting louder as his deadline for Putin nears; for now, the market is ignoring it as noise,” said Vandana Hari, founder of consultancy Vanda Insights, referring to the Russian president. “There will be recalibration if and when the threats are carried through, depending on the perceived risk of supply disruption.”
In the US, data showed the services sector effectively stagnated in July, aligning with other signals that the economy is flashing warning signs. Figures last week showed a much weaker labor market than previously thought.
Meanwhile, petroleum industry estimates painted a mixed picture of moves in US stockpiles. Nationwide crude holdings fell 4.2 million barrels last week, although oil reserves at the key hub in Cushing, Oklahoma, rose, along with distillate inventories. An official breakdown is due later Wednesday.
Some metrics point to softer conditions. Brent’s prompt spread — the difference between its two nearest contracts — was 69 cents a barrel in backwardation, compared with more than $1 a month ago. While still a bullish pattern, with near-term prices above the next in line, the trend suggests a weakening.
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This article was generated from an automated news agency feed without modifications to text.
