In late Asian trading on Wednesday, U.S. crude oil futures for September delivery traded cautiously around $65.60. Oil prices continued to fluctuate near weekly lows as global trade tensions continued to cloud the outlook for energy demand.



The United States announced that it would impose reciprocal tariffs on major trading partners including the European Union, Japan, Canada, Mexico, South Korea and 17 other countries, adding further uncertainty to the prospects for harmonious global trade.

US President Trump imposed additional tariffs because 22 countries failed to reach an agreement within the 90-day tariff truce. At the same time, if the EU fails to reach an agreement with the US before the new deadline of August 1, it is also ready to take reciprocal countermeasures. If the EU implements retaliatory measures against US imports, it may escalate trade tensions - Trump has long warned that any economy taking countermeasures will incur additional tariffs.

It is worth noting that as importers begin to pass on tariff costs to consumers, U.S. inflation pressure is accelerating. This makes the market question whether the Federal Reserve will still cut interest rates at its September policy meeting, which is bearish for oil prices.

The June Consumer Price Index (CPI) report released on Tuesday showed that the overall U.S. inflation rate jumped to 2.7% annually, as expected, driven by a surge in the prices of imported goods.

Market experts warned that current price pressures only reflect the initial impact of tariffs on some industries, and the full effect of the Trump administration's tariffs on many countries has not yet appeared. This may prompt Federal Reserve officials to ask for more time to assess the impact of tariffs on inflation.


(Daily chart of US crude oil September futures, source: Yihuitong)

At 13:56 Beijing time, the September futures price of U.S. crude oil is currently trading at US$65.60 per barrel.