Trump’s shortened deadline for Russia and the US-EU trade accord cause oil to increase 2%
Monday saw a 2% increase in oil prices following a trade agreement between the United States and the European Union and the declaration by U.S. President Donald Trump that he would shorten the timeframe for Russia to cease its war in Ukraine or face sanctions.
U.S. West Texas Intermediate crude increased $1.40, or 2.2%, to $66.56 at 12:58 p.m. EDT (1658 GMT), while Brent crude futures were up $1.42, or 2.1%, at $69.86 a barrel.
Following Trump’s announcement that he was cutting the 50-day deadline he given Russia over its war in Ukraine to 10–12 days, Brent reached its highest price in ten days.
According to Tony Sycamore, a market analyst at IG, the agreement between the United States and the European Union and the potential prolongation of the U.S.-China tariff hiatus are also bolstering oil prices and global financial markets.
A 15% U.S. import tax on the majority of EU goods is part of the framework trade agreement with the EU that was revealed on Sunday. The agreement also called for the EU to buy $750 billion worth of American energy in the upcoming years, according to Trump.
“A significant portion of everything that Europe is receiving from Russia will have to be relinquished,” stated Phil Flynn, a senior analyst at Price Futures Group. “Not only does it (the trade pact) give U.S. producers a huge boost with this commitment, it also puts more pressure on (Russian President Vladimir) Putin to come to the table.”
The goal of Monday’s conference in Stockholm is to try to extend the tariff ceasefire before its expiration on August 12.
A strong dollar and declining Indian oil imports have weighed on crude prices, according to Tamas Varga, an analyst at PVM, who also noted that the U.S.-EU deal eliminated another layer of uncertainty and that the emphasis appears to be returning to fundamentals.
Before eight OPEC+ members meet separately on Sunday to discuss whether to increase oil output for September, a panel of OPEC+ members emphasized on Monday the importance of fully adhering to oil production accords.
By the end of September, ING anticipates that OPEC+, which consists of the Organization of the Petroleum Exporting Countries and allies like Russia, would have resumed the full return of 2.2 million barrels per day of additional voluntary supply cutbacks.
