Oil rates drop as markets eye Fed decision
(MENAFN) Oil prices edged lower on Tuesday as markets weighed the economic implications of the recent US-EU trade agreement and looked ahead to the U.S. Federal Reserve’s upcoming interest rate decision.
Brent crude, the global benchmark, dropped by around 0.22% to $69.41 per barrel as of 10:42 a.m. local time (0742 GMT), down from $69.57 the previous session. Similarly, the U.S. benchmark West Texas Intermediate (WTI) crude slipped 0.31% to $66.51 per barrel, compared to Monday’s closing price of $66.72.
The decline comes after Sunday’s announcement of a new trade agreement between Washington and Brussels. Under the deal, the U.S. will apply a 15% tariff on most European goods—half the previously threatened 30%. Additionally, the EU agreed to invest $600 billion in the U.S. and purchase $750 billion worth of American energy and military products.
U.S. President Donald Trump hailed the agreement as a win for both sides, calling it a step toward closer relations. European Commission President Ursula von der Leyen also welcomed the outcome, describing it as the result of “tough negotiations” between the two economic giants.
Despite the easing of trade tensions, analysts say concerns remain over the broader economic impact of the tariffs, contributing to investor caution.
Oil traders are now turning their attention to the U.S. Federal Reserve’s policy meeting scheduled for July 29–30. While interest rates are expected to remain unchanged this month, market observers predict potential rate cuts could follow in September. Higher interest rates tend to boost the value of the U.S. dollar, which can reduce global oil demand and exert downward pressure on prices.
Adding to the geopolitical uncertainty, Trump on Monday issued a renewed ultimatum to Russia, warning of potential sanctions and secondary tariffs if it does not end the war in Ukraine within 10 to 12 days—a far shorter timeline than the previously suggested 50 days. The announcement, made during a joint press conference with UK Prime Minister Keir Starmer in Scotland, raised fears of supply disruptions from Russia, one of the world’s leading oil exporters. These concerns helped limit the decline in oil prices.
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