Oil falls amid economic fears, investors await the US Federal Reserve’s decision
29 July 2025 08:41
Oil prices are declining on Tuesday due to uncertainty about the global economic outlook after the US-EU deal, as well as the expectation of the US Federal Reserve’s decision on interest rates. This is reported by "Komersant Ukrainian" with reference to Reuters.
According to OilPrice.com, Brent crude oil futures fell 12 cents, or 0.17%, to $69.92 per barrel as of 08:29 Kyiv time, while the cost of US West Texas Intermediate oil was $66.56, down 15 cents, or 0.22%.
Both contracts closed up more than 2% in the previous session, and Brent on Monday reached its highest level since July 18.
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US and the EU
The trade agreement between the United States and the European Union, although it provides for a 15% duty on imports of most goods from the EU, avoided a full-scale trade war between the two main allies, which would have affected almost a third of world trade and worsened fuel demand forecasts.
The agreement also provides for the EU to purchase $750 billion worth of American energy in the coming years, which analysts say the European Union has little chance of fulfilling. At the same time, European companies are to invest $600 billion in the United States during Donald Trump’s second term in office.
“While the completion of the US-EU trade deal has come as a relief to global markets in a time of heightened uncertainty, the timing and phasing of investment remains unclear. We believe that the 15% rate will create obstacles to economic growth in the eurozone, but is unlikely to lead to a recession,”
– ANZ analysts said.
US, China, Fed
Meanwhile, top U.S. and Chinese economic officials met in Stockholm on Monday for five hours of talks to resolve longstanding economic disputes that are at the center of a trade war between the world’s two largest economies. Discussions are expected to continue today.
Oil market participants are also looking ahead to the July 29-30 meeting of the Federal Reserve’s Open Market Committee, where the Fed is expected to keep rates unchanged but may signal a softer approach due to signs of cooling inflation, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
“Momentum in the short term is favorable for growth, but the market remains vulnerable to volatility caused by unexpected central bank decisions or a breakdown in trade talks. The likelihood of an economic slowdown and potential rate cuts by the Federal Reserve remains uncertain, limiting oil’s upside potential,”
– said Sachdeva.
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