Oil prices dropped for the third straight session on Tuesday, as diminishing optimism over a potential trade agreement between the U.S. and Europe raised concerns about a slowdown in economic activity across key oil-consuming regions.
By 12:03 p.m. EDT, Brent crude futures had declined by 92 cents (1.3%) to $68.29 per barrel, while U.S. West Texas Intermediate (WTI) crude for August delivery, set to expire the same day, fell $1.09 (1.6%) to $66.11. The more actively traded September WTI contract dropped by 92 cents (1.4%) to $65.03.
According to EU diplomats cited by Reuters, the European Union is considering broader retaliatory measures against the U.S., as the chances of reaching a favorable trade agreement with Washington appear to be slipping.
President Donald Trump has imposed an August 1 deadline for nations to strike trade deals or face stiff tariffs, including a potential 30% tariff on EU imports if no deal is reached.
Meanwhile, the possibility of a U.S.-India interim trade deal before the deadline is also fading, according to two Indian government sources quoted by Reuters.
“The tariff issue seems to be gaining more attention as the U.S. deadline approaches,” said analysts at Ritterbusch and Associates in a research note.
Diesel led the losses across the energy sector, highlighting growing concerns about the broader economic outlook. The industrial fuel, vital for manufacturing, construction, and heavy transport, had recently outperformed other oil products due to limited global supplies. However, U.S. ultra-low sulfur diesel futures fell over 3% to $102.16 per barrel on Tuesday.
Still, Ritterbusch analysts noted that crude’s decline could be cushioned if the U.S. chooses to reduce or postpone the proposed tariffs.
In addition, a Reuters poll of analysts estimated that U.S. crude oil inventories likely dropped by about 600,000 barrels for the week ending July 18.
