On Friday, West Texas Intermediate (WTI) crude oil futures climbed above $67 per barrel, recovering some ground after the previous session's losses. This upward trend extends into a second consecutive week of gains, driven in part by an increased geopolitical risk premium. The recent attacks in the Red Sea by Houthi forces, resulting in the sinking of two cargo ships, have raised concerns about potential disruptions to oil supplies.
Concurrently, markets are assessing the repercussions of the latest US trade policies, following President Trump's announcement of a 35% tariff on Canadian imports set for implementation on August 1st, along with proposed 15–20% tariffs broadly affecting most other trading partners. These measures are anticipated to slow global growth and reduce oil demand.
Thursday witnessed a more than 2% decline in oil prices after the Organization of the Petroleum Exporting Countries (OPEC) adjusted its global demand forecast for 2026–2029, citing decreased consumption in China. OPEC now projects 2026 demand at 106.3 million barrels per day (bpd), down from the previous forecast of 108 million bpd. Additionally, there are reports that OPEC may consider halting further output increases starting in October, a move perceived by traders as an indication that the market may face challenges in absorbing additional supply.
