Oil prices exhibited minimal variation during the early hours of trading in Asia on Friday; however, they are on track to record their most significant weekly declines since late June. This trend reflects investor apprehension regarding the potential repercussions on the global economy stemming from the tariffs that were implemented on Thursday.
Brent crude futures experienced a decrease of three cents, settling at $66.40 a barrel at 0050 GMT, indicating a potential decline exceeding 4% on a week-over-week basis. U.S. West Texas Intermediate crude futures experienced a decline of six cents, or 0.1%, settling at $63.82 per barrel, indicating a projected weekly decrease exceeding 5%. On Thursday, the United States implemented increased tariffs on a range of trade partners. Concerns regarding the tariffs have emerged, suggesting a potential decline in economic activity that could adversely affect crude oil demand, according to analysts at ANZ Bank in a recent note.
Oil prices were already under pressure following the OPEC+ group’s decision last weekend to completely reverse its most significant output cuts in September, occurring months ahead of the anticipated timeline. At Thursday’s close, WTI futures experienced a decline for six consecutive sessions, a pattern reminiscent of the last recorded downturn in December 2023. Should prices conclude the week on a downward trajectory this Friday, it would mark the most extended period of declines since August 2021.
In a development that could significantly influence the oil market, the Kremlin announced on Thursday that Russian President Vladimir Putin is scheduled to meet with U.S. President Donald Trump in the near future. This meeting has heightened expectations regarding a potential diplomatic resolution to the ongoing conflict in Ukraine. The imposition of additional U.S. tariffs on India for its procurement of Russian crude oil has contributed to mitigating the extent of the decline in oil prices. The action, nonetheless, is expected to have minimal impact on the volume of Russian oil reaching external markets, as noted by StoneX analysts in their communication to clients on Thursday. On Wednesday, Trump indicated that China, the foremost purchaser of Russian crude oil, might face tariffs akin to those imposed on Indian imports.