Oil prices dipped on Tuesday after nearly 2% gains in the previous session, as traders weighed fresh U.S. tariff developments and a larger-than-expected production hike by OPEC+ scheduled for August.
As of 0630 GMT, Brent crude futures were down 22 cents (0.3%) at $69.36 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 27 cents (0.4%) to $67.66 per barrel.
On Monday, U.S. President Donald Trump informed several trade partners—including major oil suppliers such as South Korea and Japan, along with smaller exporters like Serbia, Thailand, and Tunisia—that significantly higher tariffs would take effect on August 1. However, he later stated that the deadline was not set in stone.
The uncertainty surrounding the tariff plan has raised concerns about its potential impact on global economic growth and, by extension, oil demand.
Despite those worries, signs of robust demand—especially in the United States, the world’s largest oil consumer—have helped support prices. Travel group AAA projected a record 72.2 million Americans would travel over 50 miles for the Fourth of July holiday, pointing to strong seasonal consumption.
Investor sentiment was also upbeat ahead of the holiday, with data from the U.S. Commodity Futures Trading Commission showing that money managers increased their net-long positions in crude oil futures and options contracts for the week ending July 1.
“Near-term demand remains solid due to seasonal trends,” said Emril Jamil, senior analyst at LSEG Oil Research. “The real question is whether future demand can keep pace with the larger-than-expected supply increase from OPEC+.”
Further demand strength was noted in India, the world’s third-largest oil consumer, where June fuel consumption rose 1.9% compared to the same month last year, according to government data.
On Saturday, OPEC and its allies—collectively known as OPEC+—agreed to boost oil production by 548,000 barrels per day (bpd) in August. This increase surpasses the 411,000 bpd monthly hikes seen over the previous three months.
The latest move nearly eliminates the 2.2 million bpd in voluntary production cuts the group had implemented. According to sources familiar with OPEC+ planning, the alliance is expected to approve an additional increase of around 550,000 bpd for September when it reconvenes on August 3—effectively phasing out all remaining cuts.
Still, analysts noted that actual supply boosts have lagged behind these targets, with most of the additional barrels coming from Saudi Arabia.
