Oil prices held steady on Thursday as investors weighed the potential impact of US president Donald Trump’s tariffs on global economic growth, while a weaker dollar and signs of robust US gasoline demand provided some support.
Brent crude (BZ=F) was trading at $70.21 a barrel, while West Texas Intermediate (CL=F) was changing hands at $68.31.
As policymakers continue to express concern over the inflationary impact of Trump’s tariffs, the minutes from the Federal Reserve’s 17-18 June meeting, released on Wednesday, showed that only “a couple” of officials felt that interest rates could be cut as soon as this month. Higher interest rates typically dampen demand for oil by making borrowing more expensive.
However, a weaker US dollar, which made oil cheaper for holders of other currencies, offered support to prices. Oanda senior analyst Kelvin Wong noted that the softer dollar in Asia trading was helping to prop up oil prices.
Further underpinning prices, US crude stocks saw a rise, while gasoline and distillate inventories fell, according to data from the Energy Information Administration (EIA) on Wednesday. Gasoline demand surged 6% to 9.2 million barrels per day last week, the EIA reported.
Global demand also showed signs of strength. JP Morgan noted that global daily flights averaged 107,600 during the first eight days of July, marking an all-time high. Flights in China had reached a five-month peak, while port and freight activities pointed to sustained trade expansion from last year.
In a client note, JP Morgan said:
