Oil prices go down amid concerns over impact of trade frictions on fuel consumption

On Tuesday, oil prices are declining due to pressure from concerns over escalating trade tensions. Market participants are worried about the impact of increasing friction between the US and EU on economic activity and fuel demand. A day earlier, oil prices were also declining.

According to Priyanka Sachdeva from Phillip Nova, market participants are now closely watching the development of negotiations between the world's largest economies ahead of the August 1 deadline for the introduction of new tariffs. Bloomberg notes that hopes for an agreement between the US and EU are growing weaker with each passing day. EU countries are preparing a package of retaliatory measures in case of imposition of higher US duties.

At the same time, a weaker dollar and new restrictions on Russian oil, which provided some support to oil prices, failed to offset the negative impact of trade tensions. Meanwhile, supply concerns have generally eased due to increased output by major producing countries, also putting pressure on commodity prices. Now the main concerns of investors are related to the state of the global economy amid changes in US trade policy.