Market News
Oil prices march higher as traders look to Trump's India-Russia tussle
Oil (BZ=F, CL=F)
Oil prices were set to be volatile on Thursday, having already endured a selloff on Wednesday, as traders look to the latest signals emerging from US president Donald Trump's tariff wars.
On Wednesday, Trump upped the US tariffs on India to 50% in retaliation for its purchases of Russian oil. The new import tax will go into effect 21 days after 7 August, he said.
India has largely refused to stop buying Russian oil due to the fact it's difficult to find a substitute. It buys around 2 million barrels a day, according to Financial Times reporting.
The country's officials responded by calling the threat “unjustified” and reaffirmed its commitment to protecting its economic interests.
Trump wants to put economic pressure on Russia to end the Ukraine war — moves which sent the black commodity to an eight-week low in Wednesday's session.
Read more: UK house prices rise by more than £1,000 in July
Brent crude futures (BZ=F) traded at around $66.31 a barrel on Thursday, about 0.7% higher than the previous session.
West Texas Intermediate (CL=F) prices also rose around 0.7% to $64.81 a barrel.
Prices earlier in the week had been sensitive to considerations about Opec+ output targets. The cartel made moves to hike output by 547,000 barrels per day (bpd) in September. The increases add to oversupply concerns surrounding the US's oil consumption.
The production increase marks the full and early reversal of Opec+’s most significant supply cuts, which had been implemented to support prices during the pandemic. It also includes a separate boost for the United Arab Emirates (UAE), raising total output by about 2.5 million bpd, roughly 2.4% of global oil demand. Opec+ justified the move by citing a resilient global economy and low stockpiles.
There are worries that the group will increase supply again after September, with discussions about unwinding a further 1.65 million bpd of cuts at the group's next meeting on 7 September ratcheting up tensions.
