WASHINGTON (dpa-AFX) - Crude oil price fell modestly on Tuesday as the previously predicted supply-side pressure from Russia due to President Donald Trump's sanctions waned with his 50-day ultimatum.
Today, the WTI Crude Oil for August delivery closed down by $0.46 at $66.52 per barrel.
September month Brent Crude contract was last seen trading today, down by $0.45, to $68.76 per barrel.
The OPEC Monthly Oil Market Report (MOMR) said on Tuesday that the producers pumped 41.559 million barrels per day of crude oil in June, up by 349,000 bpd from May but lower than their planned 411,000 bpd increase.
On Monday, expressing displeasure with Russian President Vladimir Putin's audacity to relentlessly extend the war with Ukraine (that began in February 2022), the Trump threatened Russia with heavy sanctions on their oil supply and 100% secondary tariffs to countries buying from Russia.
As of now, Russia earns hundreds of billions of dollars from shipping oil to potential buyers such as India and China.
However, Trump gave a grace period of 50 days' time for both nations to reach a ceasefire agreement.
In response, the Russian Foreign Minister stated that their country was prepared for any tax threats.
Trump also stated that the US would supply Ukraine with top-of-the-line weapons to combat Russia, including Patriot missiles.
A rise in oil prices due to the sanctions was contained due to the 50-day grace period.
If the proposed sanctions are implemented, the oil trade ecosystem would alter drastically but traders are not discounting Trump's practice of extending deadlines or reversing his stance.
Tariffs result in a slowdown of the economy and reduce global fuel demand, thereby pulling oil prices lower.
As the August 1 deadline for reaching deals with the US is just a fortnight away, countries are pacing up to reach an agreement with the US.
Investors feel that oil's movement could remain volatile until the trade deals are finalized.
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