Oil prices dipped during Monday’s Asian trading session, extending last week’s sharp downturn amid growing anticipation of upcoming talks between the United States and Russia that could signal a de-escalation of the conflict in Ukraine.
Adding to the pressure, China — the world’s biggest oil consumer — released July inflation data that fell short of expectations, showing little momentum in economic recovery. This, coupled with several recent weak economic indicators, has investors cautious about future oil demand.
By 21:35 ET (01:35 GMT), October Brent crude futures were down 0.8% at $66.08 a barrel, and West Texas Intermediate (WTI) futures fell 0.8% to $62.47 a barrel. Both benchmarks posted losses exceeding 4% last week.
Focus on US-Russia Summit and Sanctions
A high-profile summit is scheduled for August 15, when President Donald Trump will meet Russian President Vladimir Putin to discuss possible resolutions to the Ukraine war. Meanwhile, the U.S. has stepped up efforts to limit Russian oil exports by imposing tariffs on key buyers like China and India.
Trump’s administration slapped tariffs as high as 50% on India to discourage purchases of Russian oil and has hinted at similar actions targeting China. Although these tariff threats offered some support to oil prices last week, broader concerns about U.S. trade policies weighed on market sentiment.
China Inflation Disappoints; US CPI Awaited
China’s July consumer price index (CPI) showed no growth, while producer prices contracted more than anticipated, indicating ongoing deflationary trends. These figures reflect subdued effects from Beijing’s stimulus programs and a recent easing in trade tensions with the U.S.
Furthermore, adverse weather conditions during July may have dampened economic activity in China.
All eyes now turn to the U.S. CPI report for July, due Tuesday. Any indication of cooling inflation could increase expectations that the Federal Reserve will cut interest rates in September. Given the U.S.’s status as the top global oil consumer and potential tariff-related price pressures, this data will be closely watched.
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