Oil Prices Fall over US Demand, Trade Policy Uncertainties
In the global commodity market, the prices of crude oil fell on Wednesday amid renewed concerns over US trade policy, expectations of elevated inflation, and signs of weak demand in the world’s largest oil consumer, the US.
Brent crude fell by 0.1%, trading at $66.99 per barrel, down from $67.09 at the previous session’s close. Similarly, US benchmark West Texas Intermediate (WTI) decreased by about 0.2%, settling $64.78 per barrel, compared to $64.94 in the prior session.
The downward pressure comes as US President Donald Trump reiterated that he has no intention of extending a pause on planned tariffs, initially delayed until July 9. “No, I’m not thinking about the pause. I’ll be writing letters to a lot of countries,” Trump said on Tuesday, fueling uncertainty around Washington’s “America First” trade stance.
Back on April 2 — a date Trump dubbed “Liberation Day” — the US introduced a baseline 10% tariff, with country-specific rates determined by trade barriers facing American exports. A temporary 90-day exemption, excluding China, was granted on April 9. Analysts say the administration’s firm tariff position may weigh on near-term economic growth, suppressing energy demand and keeping oil prices under pressure.
Inflation expectations also added to bearish sentiment. During a panel at the European Central Bank’s forum in Portugal, Federal Reserve (Fed) Chair Jerome Powell said the Fed might have cut interest rates if Trump had not pursued such aggressive tariff policies.
“In effect, we went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the US went up materially as a consequence,” Powell noted. He added that while inflation remains within expectations when tariffs are excluded, elevated inflation readings are likely over the summer months.
The Fed recently held its policy rate steady in the 4.25% to 4.5% range. Higher interest rates typically dampen demand for risk assets like oil.
Further compounding market weakness, the American Petroleum Institute (API) reported a surprise 680,000-barrel increase in US crude inventories last week, defying market expectations for a 2.26 million-barrel drawdown. The data signaled weaker-than-expected demand and added to the downward pressure on prices.
Traders now await official inventory data from the US Energy Information Administration (EIA), expected later on Wednesday. A confirmed build could reinforce bearish sentiment, while a draw may offer upside support. #Oil Prices Fall over US Demand, Trade Policy Uncertainties
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