Trade negotiations between the U.S. and the EU over oil tariffs on hold, with President Trump extending the deadline.
Oil prices held steady on Tuesday following President Donald Trump's extension of the deadline for trade talks with the European Union. The extension eased concerns about potential US tariffs on the bloc that could impact fuel demand.
At 8:35 ET, Brent crude futures declined by 17 cents to $64.61 per barrel, while US West Texas Intermediate crude fell 18 cents to $61.35 per barrel. Initially, the contracts had risen following Trump's announcement that he would prolong trade negotiations with the EU until July 9.
Global markets rallied on Monday, and the euro strengthened after Trump delayed the imposition of 50% tariffs on EU goods. According to UBS analyst Giovanni Staunovo, Trump's decision to postpone higher tariffs and his comments on possible sanctions on Russia were providing moderate support to crude prices.
Trading volumes remained light on Monday due to the US Memorial Day holiday. Separately, Trump criticized Russian President Vladimir Putin for launching a large-scale aerial attack on Ukraine, suggesting he was considering imposing new sanctions on Moscow.
On Friday, both Brent and WTI crude prices increased due to limited progress in US-Iran nuclear talks and anticipation of increased oil demand ahead of the Memorial Day weekend. Additionally, a decline in the number of operating oil rigs in the US by eight last week, reducing them to their lowest level since November 2021, indicated possible future supply tightness.
The gains were, however, capped by the expectation that OPEC+ might decide to raise output by an additional 411,000 barrels per day for July at a meeting scheduled for Sunday. Reports suggest that the group could unwind the rest of its voluntary production cut by the end of October, having already raised output targets by about 1 million barrels per day for April, May, and June.
The steady oil prices might be influenced by the current state of the energy industry, as any changes in global business dynamics, such as the potential impact of US tariffs on the EU's fuel demand, may affect the overall demand for oil-and-gas. Moreover, the decisions made in the finance sector, like Trump's decision to postpone higher tariffs and his comments on possible sanctions on Russia, have the potential to provide moderate support to the oil-and-gas business.
