Oil Fell As U.S. Trade Deal Optimism Waned

Oil prices fell as the U.S. dollar strengthened and optimism faded over a potential breakthrough in U.S. trade talks with key partners ahead of next week’s deadline, Mia Gindis reported for Bloomberg News.

While crude has remained range-bound this month, it is down for the year amid concerns of oversupply as OPEC+ continues to boost output.

West Texas Intermediate (WTI) crude slid more than 1% to settle near $65 a barrel after President Donald Trump said the U.S. has only a 50-50 chance of reaching a trade deal with the EU—contrasting sharply with the optimism expressed by European diplomats this week.

Trump also noted that most tariff rates are now essentially finalized.

The effective U.S. tariff rate is at its highest in a century, by some estimates—a potential threat to global energy demand. Adding to headwinds, Trump said he had no plans to fire Federal Reserve Chair Jerome Powell, which boosted the dollar and made dollar-denominated commodities like oil less attractive.

While crude has remained range-bound this month, it is down for the year amid concerns of oversupply as OPEC+ continues to boost output. The group is scheduled to meet on August 3 to decide on production levels.

One member—Venezuela—received a production reprieve after the U.S. authorized Chevron to resume oil operations there.

“We expect crude to slowly sell off this fall, driven by steady acceleration of stock builds, softening physical markets, reduced refinery margin support, and continued de-escalation of geopolitically driven supply risk,” Macquarie Group analysts, including Vikas Dwivedi, wrote in a note. Catherine Cartier and Alex Longley also contributed reporting for Bloomberg News.