Oil futures sank because the escalating world commerce warfare and the chance that OPEC+ might halt output hikes flashed warning indicators for vitality demand.
West Texas Intermediate futures fell to settle under $67 a barrel after Bloomberg reported that the cartel is discussing a pause in additional manufacturing will increase from October. The early-stage deliberations are happening as President Donald Trump unveils a brand new spherical of tariffs, together with a 50% fee on Brazil, which sends some oil to the US.
Merchants are most likely deciphering the OPEC+ talks as an indication that “the market might not be capable of deal with extra oil,” mentioned Ole Hansen, head of commodity technique at Saxo Financial institution A/S. “We’re probably seeing the chance of an oversupplied market” as soon as the height demand interval ends, he mentioned.
The US-led tariff warfare has intensified in latest days, and Trump’s newest salvo of calls for has overshadowed earlier offers with main commerce companions together with China and the UK, which had served to mollify buyers. Now, the market is going through a few of the highest tariff charges in US historical past, setting the stage for an unsure interval for world progress.
Oil has edged larger this week even after OPEC+ determined over the weekend to lift output by greater than anticipated in August. Power Facets mentioned it expects world oil demand to rise by lower than 1 million barrels a day within the third and fourth quarters amid stress from US tariff insurance policies.
Director of Market Intelligence Amrita Sen mentioned the marketing consultant was “apprehensive in regards to the fourth quarter and into 2026 as a result of tariff talks are again.”
Timespreads additionally present that perceptions of power in bodily market are waning. Whereas WTI’s immediate unfold — the hole between its two nearest contracts — continues to be in a bullish, backwardated construction, the differential narrowed to $1.25 from as excessive as $1.57 earlier this week.
In the meantime, Houthi assaults within the Crimson Sea have sunk two cargo vessels and left a number of crew members useless. The escalation has notably did not inject a threat premium into oil costs, with buyers reluctant to purchase on geopolitical developments after a standoff between the US and Iran spared vitality infrastructure.
Oil Costs
- WTI for August supply dropped 2.6% to settle at $66.57 a barrel in New York.
- Brent for September settlement fell 2.2% to $68.64 a barrel.
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