BENGALURU/SINGAPORE: Oil prices were little changed on Tuesday as traders assessed rising supply by OPEC+ against worries of weaker demand and US President Donald Trump’s new threats on India over its Russian oil purchases.
Brent crude futures dipped 1 cent to $68.75 a barrel by 9:31 a.m. Saudi time, while US West Texas Intermediate crude was down 2 cents at $66.28.
Both contracts fell by more than 1 percent in the previous session to settle at their lowest in a week.
Both benchmarks have receded because extra capacity from OPEC+ is acting as a buffer for any shortfalls in Russian supplies, said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September.
It marks a full and early reversal of the group’s largest tranche of output cuts, amounting to about 2.5 million bpd, or around 2.4 percent of global demand, though analysts caution the actual amount returning to the market will be less.
The rising supplies come amid renewed concerns about demand, with some analysts expecting faltering economic growth in the second half of the year.
JPMorgan analysts said on Tuesday the risk of a US recession was high as labor demand has stalled. In addition, China’s July Politburo meeting signalled no additional policy easing, with the focus shifting to structural rebalancing of the world’s second-largest economy, the analysts wrote in a note.
At the same time, investors are eyeing possible supply disruptions.
US President Donald Trump has said he could impose 100 percent secondary tariffs on Russian crude buyers such as India after announcing a 25 percent tariff on Indian imports in July.
On Monday, Trump again threatened higher tariffs on Indian goods over the Russian oil purchases. New Delhi called his attack “unjustified” and vowed to protect its economic interests, deepening the trade rift between the two countries.
India is the biggest buyer of seaborne crude from Russia, importing about 1.75 million bpd from January to June this year, up 1 percent from a year ago, according to data provided to Reuters by trade sources.
Traders are also awaiting any developments on the latest US tariffs on its trading partners, which analysts fear could slow economic growth and dampen fuel demand.
