Oil prices dipped Friday as the US imposed additional tariffs on Indian goods, threatening $87 billion in exports, though strong US economic data and expected Fed rate cuts kept the market on track for a weekly gain.
Brent crude was trading at $67.44 per barrel at 10.22 a.m. local time (0722 GMT), down 0.2% from the previous close of $67.60.
US benchmark West Texas Intermediate (WTI) fell 0.3% to $63.89 from $64.07 in the prior session.
US President Donald Trump doubled tariffs on India to 50% from 25% over the country’s purchases of Russian crude.
Analysts warned the measures threaten India’s $87 billion in exports to the US, a step that could damp economic growth and curb energy demand in the near term, adding further pressure on oil prices.
- Strong US growth and Fed expectations support prices
However, oil prices remain on track for an almost 0.2% weekly gain despite Friday’s losses.
The US economy expanded by 3.3% quarter-on-quarter in the second quarter of the year, exceeding the preliminary estimate of 3%.
The data is supporting prices on expectations that it will bolster the demand outlook in the world’s biggest oil consumer.
Meanwhile, traders are pricing in an 85% chance of a 25-basis-point rate cut by the Fed in September, with another reduction expected by year-end.
Fed Governor Christopher Waller said he would back a quarter-point move next month, adding that he sees room for additional cuts over the next three to six months.
Lower rates are expected to boost growth and lift demand in oil-reliant sectors, supporting prices, according to analysts.
Investors are focused on the personal consumption expenditures price index due Friday, a key inflation gauge for the Fed that could help shape monetary policy in the months ahead.
- US crude inventories signal continued demand
Moreover, data indicating a fall in US crude inventories further supported upward price movements, signaling strong demand in the world's largest oil-consuming nation.
US crude inventories fell by around 2.4 million barrels to 418.3 million barrels, above the forecasted fall of 1.7 million barrels, according to data from the US Energy Information Administration (EIA).
Over the same period, gasoline inventories decreased by approximately 1.2 million barrels to 222.3 million barrels.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr