Brent plunges amid rising trade frictions
The front-month ICE Brent contract has declined by $1.46/bbl on the day, to trade at $67.12/bbl at 09.00 GMT.
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Upward pressure:
Brent crude’s price has found modest support from declining crude oil stocks in the US.
Commercial US crude oil inventories have fallen by 3 million bbls to touch 424 million bbls for the week ending 1 August, according to data from the US Energy Information Administration’s (EIA).
VANDA Insights’ founder Vandana Hari said the latest EIA data was bullish as it showed a “sizeable drawdown across crude and refined products.”
The EIA report came one day after the American Petroleum Institute (API) reported a bigger draw of 4.2 million bbls in US crude inventories during the same period.
A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price, according to market analysts.
Downward pressure:
Oil has extended losses as trade tensions flared between the US and India.
In a sharp escalation, US President Donald Trump on Tuesday signed an executive order imposing an additional 25% tariff on Indian goods, effectively doubling the tariff rate on Indian exports to the US to 50%.
The decline in Brent’s price comes as Washington increases pressure on New Delhi to reduce its imports of Russian energy.
Trump’s announcement has heightened fears of a broader economic fallout. Market analysts say the development could weigh on global commodities by dampening demand.
“Sentiment remained cautious and fluid over the potential impact of US President Donald Trump’s newly-announced additional 25% tariffs on India for importing Russian oil,” Hari said.
By Aparupa Mazumder
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