WTI remains subdued below $69.00 amid potential impact of upcoming US tariffs on economy

• WTI price struggles amid growing demand concerns, fueled by fears that US tariffs could negatively impact the global economy.

• President Trump has imposed higher tariffs on US trading partners, with new rates set to take effect on August 1.

• Oil prices are on track for a weekly gain of over 6%, driven by mounting supply concerns.

West Texas Intermediate (WTI) Oil price extends its losses for the second successive session, trading around $68.70 per barrel during the Asian hours on Friday. Crude Oil prices face challenges due to rising demand concerns, driven by the potential for United States (US) tariffs on the global economy.

Traders adopt caution on Friday after US President Donald Trump imposed higher tariff rates on US trading partners set to go into effect on August 1. On Thursday, Trump signed an executive order imposing tariffs ranging from 10% to 41% on US imports from dozens of countries and foreign locations, including Canada, India, and Taiwan, that failed to reach the trade deals deadline, per Reuters.

However, Oil prices are on track for a strong weekly gain of over 6%, marking the strongest performance since early June, driven by the supply concerns following Trump’s threat to impose 100% secondary tariffs on buyers of Russian crude. The United States also warned China, one of the largest Oil consumers, of heavy penalties if it continues purchasing Russian Oil.

The recent US data showed that inflation increased in June as tariffs supported prices for imported goods such as household furniture and recreation products. Core US Personal Consumption Expenditure Price Index (PCE) inflation ticked higher in June, rising 0.3% MoM as many market participants had expected. On an annualized basis, PCE inflation accelerated to 2.6% YoY, outrunning the expected hold at 2.5%.

The US PCE report suggests that price pressures would increase in the second half of the year and delay the US Federal Reserve (Fed) from cutting interest rates until at least October. It is important to note that higher interest rates would also impact Oil as the higher borrowing costs can limit economic growth in the United States, the world’s largest Oil consumer. Traders shift their focus toward the United States (US) Nonfarm Payrolls (NFP), due later in the day, which is expected to hold in positive territory.