SINGAPORE — Oil prices fell on Thursday after gaining 3 percent in the previous session as investors are wary higher US tariffs may be reinstated, which could cause lower fuel demand, and as major producers are expected to announce an output hike.
Brent crude futures LCOc1 fell 45 cents, or 0.65 percent, to $68.66 a barrel by 0645 GMT. US West Texas Intermediate crude CLc1 declined 44 cents, or 0.66 percent, to $67.01 a barrel
Both contracts rose to their highest in one week on Wednesday as Iran suspended cooperation with the UN nuclear watchdog, raising concerns the lingering dispute over the Middle East producer’s nuclear program may again devolve into armed conflict, and the US and Vietnam reached a preliminary trade deal.
Still, there is increasing uncertainty around US trade policy as the 90-day pause on the implementation of higher tariffs will end on July 9 without any new trade deals with several large trading partners such as the European Union and Japan.
Additionally, the Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russia, known as OPEC+ will likely agreed to raise their output by 411,000 barrels per day (bpd) at their meeting this weekend.
With the uncertainty around both events, and the upcoming July Fourth Independence Day holiday in the US, “market participants will probably not want to carry too much risk into the long US weekend,” ING analysts said in a note on Thursday.
