Oil prices moved slightly lower on Tuesday as traders balanced optimism over a prolonged U.S.-China tariff truce with caution ahead of key U.S. inflation data and upcoming peace talks between the United States and Russia.
As of 07:35 ET (11:35 GMT), Brent crude futures for October delivery were down 0.4% at $66.34 per barrel, while West Texas Intermediate (WTI) crude slipped 0.6% to $63.61.
U.S.-China Trade Pause Extended
The market opened on firmer ground after Washington and Beijing agreed to extend their current trade ceasefire by 90 days, keeping tariffs well below the punitive levels imposed earlier this year. The temporary deal, which had been set to expire today, has offered some relief to global trade flows and improved sentiment around a potential long-term resolution.
Still, the recent rollout of President Donald Trump’s latest tariffs last week kept investors on edge, as higher duties could slow global growth and weigh on energy demand despite the truce extension.
Inflation Report in Focus
The early boost faded as attention shifted to the U.S. consumer price index release later in the day. The data will be closely watched for clues on the Federal Reserve’s policy direction. While weaker labor market readings have strengthened bets on a rate cut in September, persistently high inflation may make some Fed officials reluctant to ease policy—especially given uncertainty over the broader economic effects of new trade measures.
High-Stakes Alaska Meeting
Oil markets are also keeping a close watch on the planned meeting this Friday in Alaska between President Trump and Russian President Vladimir Putin. The talks will center on ending the war in Ukraine, though geopolitical and trade tensions loom large.
Trump has threatened to impose heavy tariffs on Russia’s top oil customers, including India and China—potentially up to 50%—which could disrupt established trade patterns. A successful peace agreement could see Russian oil exports ramp up, boosting global supply, but Ukraine has already stated it will not agree to any settlement involving territorial concessions.
The outcome of both the inflation report and the Alaska talks could set the tone for oil markets in the weeks ahead.
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