Brent loses amid growing trade tensions
The front-month ICE Brent contract has moved $0.38/bbl lower on the day, to trade at $68.53/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
The European Union’s (EU) latest round of sanctions on Russian energy has provided modest support to Brent’s price this week.
Last week, the EU approved the 18th package of economic sanctions, aimed at limiting Moscow’s oil revenues.
The EU targeted 105 shadow fleet vessels that Russia allegedly uses to circumvent the price caps set on its crude and oil products.
The EU has also lowered the oil price cap for Russian crude from $60/bbl to $47.60/bbl.
“It [price cap] will be set dynamically at 15% below market rates moving forward, which would see the threshold start off somewhere between USD45–50/bbl [$45-50/bbl],” said ANZ Bank’s senior commodity strategist Daniel Hynes.
Downward pressure:
Brent’s price has slipped on worries that mounting US-EU trade tensions may dent crude oil demand by undermining global economic activity.
“[The] persistent US trade tensions stoked worries that countries may not be able to strike deals before the August 1 deadline,” remarked VANDA Insights’ Vandana Hari.
EU envoys are set to meet this week to formalise a plan to respond to a possible no-deal scenario with the US, Bloomberg Reports.
The US is expected to put a near-universal tariff on EU goods higher than 10%, with fewer exemptions, another Bloomberg report adds.
“The trade deal impasse could hurt economic activity and thus crude oil demand,” Hynes added.
By Aparupa Mazumder
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