Oil prices fell Thursday as several bearish factors weighed on the market. Traders grew increasingly uncertain about U.S. tariff policy after the announced 90-day pause is set to end on July 9, while comprehensive trade agreements with the European Union and Japan remain unresolved, creating downside risk for demand.
At the same time, producers in the OPEC+ coalition plan to boost supply by 411,000 barrels per day, adding further downward pressure. Signs of softer demand out of China — the world’s largest oil importer — reinforced the supply concerns: the country’s service sector posted its weakest expansion in nine months. In the United States, commercial crude inventories unexpectedly rose by 3.8 million barrels, a surprise to analysts who had anticipated a drawdown.
These developments offset Wednesday’s gains, which had been driven by geopolitical tensions over Iran’s nuclear program and a U.S.-Vietnam trade agreement. Market participants are now looking ahead to Friday’s U.S. employment report for fresh clues on the Federal Reserve’s interest-rate path; a signal of future rate cuts could lift fuel demand and provide support to oil prices.
Overall, the combination of growing supply, wavering global demand indicators and policy uncertainty has pushed oil markets lower, at least until clearer signals emerge from economic data and trade negotiations.