Oil prices closed higher for the week in the global commodity market, supported by a softer US dollar, firm US fuel demand, and renewed geopolitical tensions, even as rising inventories and trade concerns weighed on the market earlier.
Brent crude, the global benchmark, rose around 1.01% week-on-week to $68.61 per barrel on Friday, up from $67.92 the previous week. West Texas Intermediate (WTI), the US benchmark, gained 0.8% to $66.19 per barrel from $65.65.
Prices came under pressure earlier in the week after OPEC+ announced a larger-than-expected production increase of 548,000 barrels per day for August, fueling oversupply concerns. Trade tensions also resurfaced as US President Donald Trump threatened new tariffs on multiple countries from August 1, raising worries about potential demand weakness. Additionally, a 7.1 million barrel rise in US crude inventories reported midweek weighed on sentiment, defying expectations of a draw despite robust July 4 travel activity.
However, the market rebounded as the US Energy Information Administration reported a 2.7 million barrel drop in gasoline inventories, signaling strong fuel consumption during the holiday period. A weaker US dollar further lifted oil prices, making crude cheaper for buyers using other currencies, while expectations of potential interest rate cuts by the Federal Reserve added to the bullish sentiment.
On Friday, prices edged higher after Trump announced he would deliver a major statement on Russia the following week, raising prospects of new sanctions on a key oil producer. Comments from Fed officials suggesting openness to near-term rate cuts also supported the market.
Despite the gains, traders remained cautious about the potential drag on global growth from Trump’s proposed tariffs, including plans for a 20% blanket tariff on most trading partners and a 35% tariff on Canadian goods, which could dampen industrial activity and energy demand.
Overall, oil managed to post a weekly gain, underpinned by geopolitical risks, solid US demand indicators, and a weaker dollar, even as concerns over oversupply and trade tensions limited stronger advances.
