WTI trades with caution at $64 as tariff deadline nears

West Texas Intermediate futures on NYMEX, exhibit a sluggish performance slightly above the two-week low of $63.73 from Wednesday. The benchmark WTI crude oil trades cautiously near its immediate lows on persistent global demand concerns due to the tariff policy announced by President Donald Trump since his return to the White House.

The uncertainty surrounding the US tariff policy is expected to escalate further as the deadline of the 90-day pause on the imposition of reciprocal tariffs will end on July 9.

Washington provided an almost three-month relief on the tariff policy to negotiate bilateral deals with its trading partners. However, the White House seems to have failed to capitalise on the tariff relief as it has closed only one deal with the UK, with which its business is moderate.

The oil price bled at the start of the week after President Trump announced a ceasefire between Israel and Iran, which dismissed fears of the closure of the Strait of Hormuz, a passage for almost a quarter of world oil supply.

Meanwhile, traders are increasing bets supporting interest rate cuts from the Federal Reserve this year which could provide some relief to crude prices.

Fed dovish bets have increased as Donald Trump is expected to announce Fed Chair Jerome Powell’s successor for not supporting interest rate cuts. Investors expect decisions from Trump’s contender would be biased towards his economic agenda.

Analysts at Societe Generale said, “the market is pricing in President Trump appointing someone who at least at first sight appears more sympathetic to his cause.”

(Source: OANDA)