Oil stocks BP (BP), Shell (SHEL) and Chevron (CVX) were looking less slick today as prices slipped on renewed Trump tariff fears.
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BP was 0.4% lower in premarket trading, Shell was off 0.3% and Chevron dropped 0.1%.
Tariff Headache
It came as the Brent crude oil price fell around 0.5% to just under $69 in early trading, with U.S. West Texas Intermediate crude also declining by around 1%.
The main headache for markets was the possibility of U.S. tariffs being reinstated after the end of the 90-day pause on July 9. Despite doing some deals with the U.K. and Vietnam, the U.S. has still to tie up a number of trade deals with trading partners such as the EU, even with the pause deadline looming.
This would reignite fears about the global economic outlook and what that uncertainty means for oil demand from businesses and consumers.
Extra Supply
The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. That extra supply combined with faltering demand means only one direction for prices.
Adding to fears is a private-sector survey showing that service activity in China – the world’s biggest oil importer – expanded at its slowest pace in nine months in June as demand weakened and new export orders declined.
According to a Reuters report, a surprise build in U.S. crude inventories also highlighted demand concerns in the world’s biggest crude consumer.
The U.S. Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.
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