After a Wave of Losses Lasting 4 Days.. Oil Prices Stabilize

SadaNews - Oil prices stabilized after a wave of losses that lasted four days, as investors ignored U.S. President Donald Trump's threat to impose secondary tariffs on buyers of Russian energy, while American data indicated a slowdown in the largest economy in the world.

Brent crude traded below $68 a barrel after losing nearly 8% over four sessions, while West Texas Intermediate remained stable near $65.

Trump had threatened to impose higher tariffs on countries purchasing oil from Moscow, which could include China, following his recent statement that he would soon raise tariffs on India.

Indicators of Possible Ceasefire in Ukraine

U.S. Special Envoy Steve Biegun is expected to travel to Russia this week, ahead of the August 8 deadline set by Trump to reach a ceasefire with Ukraine. The Kremlin is exploring options for concessions, including the possibility of halting airstrikes, despite its insistence on continuing the war.

The drop in oil follows three months of gains, amid markets focusing on signs of a slowdown in the U.S. economy that may weaken energy demand, in addition to the "OPEC+" decision to increase supplies.

The coalition agreed last weekend to increase production by about 547,000 barrels per day starting in September, exacerbating fears of a potential surplus in supply in the second half of the year.

Preliminary Indicators of Declining U.S. Crude Stocks

In the United States, data showed a stagnation in the services sector during July, in line with other indicators suggesting a slowdown in economic performance. Last week's figures revealed a labor market much weaker than previously thought.

At the same time, estimates from the oil sector painted a mixed picture regarding changes in U.S. inventories. Crude stocks nationwide fell by 4.2 million barrels last week, while inventories at the main storage hub in Cushing, Oklahoma, increased, alongside a rise in petroleum product stocks. Official data is set to be released later today, Wednesday.

Some indicators suggest weakness in the market. The time spread for Brent crude contracts, which is the difference between the two nearest maturity contracts, was about 69 cents per barrel in a "backwardation" pattern compared to over a dollar a month ago.

Although this pattern is considered a positive indicator (when near-term prices are higher than futures), the decrease in spread may suggest a weakening in momentum.