Oil prices rallied 3% as President Trump shortened his timeframe for Russian sanctions.
USOIL – Weekly Chart
The price of USOIL on the weekly chart is approaching the $70.00 level, but this is aligning with a strong downtrend line that links to the July 2024 highs. A break above could see oil pushing on further.
Oil prices rose by more than 3% on Tuesday as Trump ramped up pressure on Russia over the situation in Ukraine. The agreement between the U.S. and Europe also included a deal on energy that will boost U.S. sales.
Trump said on Tuesday that he would start imposing tariffs on Russia “10 days from today” if Moscow did not make efforts to end the war in Ukraine. U.S. Treasury Secretary Scott Bessent has also said that he told Chinese officials that, given U.S. secondary tariffs on Russian oil, China could face high tariffs if Beijing continued to buy its crude from Russia.
In the U.S., crude stockpiles rose by 1.54 million barrels last week, and traders will await the weekly data on Thursday. Energy major Chevron has said that it is moving its Permian shale wells from a growth stage to a cash-generating stage, which implies that the real boom of domestic U.S. drilling over the last decade is reaching a plateau.
“One of the issues that has been supporting oil has been the seasonal strength of the summer months,” said Francisco Blanch, commodity head at Bank of America.
“Second half of the year surplus is going to be close to 200 million barrels,” which he said could weigh on prices. That analysis may be irrelevant in 10 days as Trump will probably end up making moves against Russia.
On the refinery side, Saudi Arabia, the world’s biggest oil exporter, may increase crude prices for Asian buyers for the second month in a row, to five-month highs due to tigher supply and robust demand.