Crude prices dipped on Tuesday as markets weighed an extension of the U.S.-China tariff truce, with attention also turning to the release of key U.S. inflation figures and high-level peace discussions between Washington and Moscow later this week.
By 07:35 ET (11:35 GMT), October Brent futures slipped 0.4% to $66.34 a barrel, while West Texas Intermediate (WTI) crude for September delivery dropped 0.6% to $63.61 a barrel.
Tariff Truce Extension Lifts Early Optimism
Prices initially found support after Washington and Beijing agreed to prolong their current tariff freeze—originally due to expire today—by another 90 days. The temporary arrangement, first struck in May, had kept tariff rates well below the triple-digit levels seen earlier in the year.
The extension was seen as a positive sign for global trade relations, with both governments signaling optimism about reaching a longer-term agreement. Still, the recent implementation of President Trump’s tariffs last week remained a key source of uncertainty for energy traders, who continue to assess whether the levies could dampen global growth and curb oil demand.
Caution Ahead of U.S. CPI Report
Early gains faded as investors braced for U.S. consumer price index data later in the session—numbers that could influence the Federal Reserve’s next interest rate move. While recent weakness in the labor market has bolstered expectations for a September rate cut, persistent inflation has kept some Fed policymakers hesitant, particularly amid the unclear inflationary effects of ongoing trade policies.
Lower interest rates often stimulate economic activity, potentially increasing energy consumption, but any sign of stubborn price pressures could temper those expectations.
Peace Talks Between Washington and Moscow in the Spotlight
Markets are also watching Friday’s planned meeting in Alaska between President Donald Trump and Russian President Vladimir Putin, where efforts to broker a resolution to the Ukraine conflict will be discussed.
The talks come after Trump threatened stricter measures against Russia’s oil sector, including steep tariffs on major buyers such as India and China. Proposed duties could reach as high as 50% for Indian crude imports, with China facing similar penalties. Analysts warn such moves could prompt both countries to seek alternative suppliers, potentially reshaping global oil flows.
Ukraine, however, has already indicated it will reject any peace deal involving territorial concessions to Russia. Even so, a breakthrough in negotiations could see Russian oil exports rise, adding to global supply and influencing prices in the months ahead.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply