Oil Prices mark steepest weekly loss since June on economic worries

Shafaq News

Oil held steady on Friday as markets awaited a meeting in
coming days between Russian president Vladimir Putin and his U.S. counterpart
Donald Trump, but prices marked their steepest weekly losses since late June on
a tariff-hit economic outlook.

Brent crude futures settled 16 cents, or 0.2%, higher at
$66.59 a barrel, while U.S. West Texas Intermediate crude futures were
unchanged at $63.88.

Brent fell 4.4% over the week, while WTI finished 5.1% lower
than last Friday’s close.

U.S. crude fell over 1% earlier in the session after
Bloomberg News reported that Washington and Moscow were aiming to reach a deal
to halt the war in Ukraine that would lock in Russia’s occupation of territory
seized during its military invasion.

U.S. and Russian officials are working towards an agreement
on territories for a planned summit meeting between Trump and Putin as early as
next week, the report said, citing people familiar with the matter.

The potential meeting raises expectations of a diplomatic
end to the war in Ukraine, which could lead to eased sanctions on Russia, and
comes as trade tensions have been on the rise between Trump and buyers of
Russian oil.

This week, Trump threatened to increase tariffs on India if
it kept purchasing Russian oil. Trump also said China, the largest buyer of
Russian crude, could be hit with tariffs similar to those levied against Indian
imports.

“Various non-oil considerations are at play, including
fears over the impact of tariffs and the headlines flying over the last few days
regarding a Trump and Putin meeting in the near term,” said Neil Crosby,
an energy market analyst at Sparta Commodities.

“Headline risk is particularly strong currently with
flip-flopping regarding who will turn up to a meeting over Ukraine and under what
circumstances.”

Higher U.S. tariffs on imports from a host of trade partners
went into effect on Thursday, raising concern over economic activity and demand
for crude oil, ANZ Bank analysts said in a note.

OPEC+ agreed on Sunday to raise oil production by 547,000
barrels per day for September, the latest in a series of accelerated output
hikes to regain market share, adding to supply.

The U.S. oil rig count, an indicator of future supply, rose
by one to 411 this week.

“Bearish sentiment has returned this week as key OPEC+
members announced a second ‘quadruple’ output unwind for September (thus fully
restoring their extra voluntary cuts of 2.2 mmb/d) and President Trump’s
sweeping import tariffs took effect against most countries,” analysts at FGE
NexantECA said.

Trump on Thursday also said he will nominate Council of
Economic Advisers Chairman Stephen Miran to serve out the final few months of a
newly vacant seat at the Federal Reserve, fuelling expectations of a more
dovish policy ahead.

Lower interest rates reduce consumer borrowing costs and can
boost economic growth and demand for oil.

The dollar firmed on Friday but headed for a weekly fall. A
stronger dollar hurts demand for dollar-denominated crude from foreign buyers.

Money managers cut their net long U.S. crude futures and
options positions in the week to August 5, the U.S. Commodity Futures Trading
Commission (CFTC) said.

(REUTERS)

Only the headline is edited by Shafaq News Agency.