Oil Prices Dip for Fourth Day as Trade Talks Stall and Diesel Builds
Crude slips below $70 as U.S.–Japan deal fails to offset demand concerns and August 1 tariff deadline looms
New York, July 23: Oil fell for a fourth straight day Tuesday, as energy traders looked past a modest U.S.–Japan trade agreement and kept their eyes on the more consequential logjam between Washington and Brussels.
Brent crude settled at $68.29, and WTI closed at $65.03, down nearly 5% since last week. The drop isn’t about oversupply; it’s about fading demand expectations in a global economy where trade talks are stalled and industrial output is flashing mixed signals.
A Small Win in Tokyo, But Brussels Remains the Bigger Risk
The short-lived bump following the U.S.–Japan tariff deal didn’t change the overall tone of the market. That agreement, while welcome, covers a narrow slice of global trade. Meanwhile, bigger talks with the EU and China remain bogged down.
The looming August 1 deadline for a possible U.S.–EU tariff escalation is now front and center. If the two sides can’t reach a deal, the concern isn’t just about higher prices on goods; it’s about downstream impacts on freight volumes, factory activity, and ultimately, fuel demand.
Energy markets don’t need a full-blown trade war to react. Even the fear of slower shipping and tighter consumer spending is enough to move prices.
Inventory Data Sends a Split Signal
U.S. government data gave the market a partial lift: crude inventories fell by 3.2 million barrels, nearly double what analysts were expecting. That’s a sign that gasoline demand is holding up and exports are steady.
But the bigger surprise was on the distillate side, where diesel inventories ticked up. It’s an odd move for midsummer and suggests that the industrial side of the economy may be cooling. Trucks and trains are still moving, but not at the pace they were a month ago.
That mismatch — strong consumer demand, softer freight — has made it harder for traders to pick a clear direction.
Supply Risks? Not This Week
On the geopolitical front, there’s been more noise than impact. The U.S. floated new sanctions on Russian oil, and the EU passed its 18th sanctions package, but neither rattled the market. Most of that risk is already priced in, and global flows haven’t been disrupted.
At the same time, OPEC+ has gradually upped supply, with Saudi Arabia signaling comfort with lower prices. That’s less a sign of panic and more of a bet that they can outlast U.S. shale and hold on to market share.
So far, that’s worked. There’s no real shortage out there, and without a supply crunch, prices will live or die by demand.
What to Watch: August 1 and Second-Half Demand
The next pressure point is clear: August 1. If the U.S. and EU can hammer out a deal, it might take the edge off some of the demand fears. If not, markets could pull back further.
Beyond that, it comes down to fundamentals. How much gas Americans burn in the back half of summer. How global shipping and manufacturing hold up. Whether OPEC+ decides to tighten the taps again.
Right now, though, the bias is clear: unless something changes fast, oil is drifting lower not because there’s too much of it, but because the world might just need less.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
