Oil prices fell on Tuesday after a prolonged 50-day deadline set by US President Donald Trump for Russia to end the war in Ukraine and avoid sanctions eased supply concerns, Reuters reports, writes UNN.
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Brent crude futures fell 12 cents, or 0.2%, to $69.09 a barrel by 06:10 GMT (09:10 Kyiv time), while US West Texas Intermediate crude futures fell 16 cents, or also 0.2%, to $6. Both contracts closed down more than $1 in the previous session.
"Trump's softening stance on sanctions against Russian oil eased fears of supply cuts, while his tariff plan continues to put pressure on the economy," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
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Oil prices rose amid potential sanctions, but then fell as the 50-day deadline instilled hopes that sanctions could be avoided, and traders questioned whether the US would indeed impose high tariffs on countries that continue to trade with Russia.
If Trump does get his way and the proposed sanctions are imposed, it will radically change the outlook for the oil market, ING analysts said in a note on Tuesday.
"China, India, and Turkey are the largest buyers of Russian crude oil. They will need to weigh the benefits of buying Russian oil at a discount against the cost of their exports to the US," the ING note said.
On Monday, Trump announced new weapons supplies to Ukraine, and on Saturday he said that from August 1, he would impose a 30% tariff on most imported goods from the EU and Mexico, in addition to similar warnings to other countries.
Tariffs could slow economic growth, which could undermine global fuel demand and lead to lower oil prices.
Data released on Tuesday showed that China's economy slowed in the second quarter. Markets are bracing for a weaker second half, as exports lose momentum, prices continue to fall, and consumer confidence remains low.
Tony Sycamore, an analyst at IG, said economic growth in China came in above consensus largely due to strong fiscal support and the front loading of production and exports for the U.S. to beat tariffs.
"Economic data released today was concerning. Today's tepid Chinese data has direct implications for commodities including iron ore and crude oil," he said.
Elsewhere, oil demand is set to stay "very strong" through the third quarter, keeping the market balanced in the near term,
the Organization of Petroleum Exporting Countries' secretary general said, according to a Russian media report.
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