OIL: After Falling Through August Crude Is Higher Today As US Punishes India

Oil prices have declined since Friday but so far today they are higher following US President Trump imposing a 25% punitive tariff on imports from India because of its significant imports of fuel from Russia. Markets don’t expect US measures to materially impact Russian exports, but there is still the risk that global supply declines as a result. 

• WTI is 1.0% higher at $64.96/bbl after reaching $65.08 but it has struggled to hold breaks above $65. Brent is up 0.8% to $67.45/bbl following an intraday high of $67.58.
• President Trump said that special envoy Witkoff made “great progress” in Russia and that he should meet with President Putin next week. He sounded very uncertain though on the chance of a truce despite his August 8 deadline. He also stated that other countries would face punitive tariffs and didn’t rule out that China would be included.
• Westpac believes that current supply trends will cap moves in Brent in the low $70s (Bloomberg).
• Despite higher output, Saudi Arabia increased its price for the second consecutive month.
• Later the Fed’s Bostic speaks on monetary policy. US preliminary Q2 productivity/ULC, July NY Fed 1-yr inflation expectations and jobless claims print as well as June German trade & IP. The BoE decision is announced and a 25bp rate cut is widely expected. Governor Bailey will follow.