Crude Oil Steadies as Traders Parse Signals on US Trade Policy

(Bloomberg) -- Oil steadied as traders digested a welter of headlines on US trade policy, including an appeal court ruling that US President Donald Trump can press on with his global tariffs.

Brent held near $67 a barrel, while West Texas Intermediate was just below $65. Trump can continue to enforce his global tariffs for now, a federal appeals court held. Elsewhere, the US and China de-escalated tensions, agreeing to a deal on how to implement a consensus reached in Geneva in earlier talks.  

Crude has dropped this year as the Trump administration’s aggressive trade agenda clouded the outlook for global growth and hurt appetite for risk assets, including commodities. At the same time, OPEC+ moved to restore idled capacity at a faster than expected pace, boosting concerns about a glut later this year.

“Increasingly, as we move into the third quarter, we fully expect to see prices probing the lower end of the $60-to-$65 range, with risks of prices below $60 as we move into the fourth quarter,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp., citing forecasts for supply growth outpacing demand.

Global oil demand this year is expected to grow more slowly than previous forecasts, while inventories are expected to swell, according to the Energy Information Administration’s Short-Term Energy Outlook released Tuesday.

An industry estimate, meanwhile, showed that US crude inventories fell by about 400,000 barrels last week. The drawdown would be the third decline in a row, if confirmed by official data later Wednesday.   

Parts of the futures curve remain in contango, a bearish pattern characterized by nearer-term contracts trading at a discount to longer-dated ones. The spread between Brent for this coming December and the same month in 2026 was 39 cents in contango.

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