West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.50 during the early Asian trading hours on Tuesday. The WTI edges lower amid concerns about weaker global demand following US President Donald Trump's doubling of the existing 25% duty on Indian exports. Traders brace for the American Petroleum Institute (API) weekly crude oil stock, which will be published later on Tuesday.
The Trump administration's decision to impose steep tariffs on Indian imports took effect, raising fears of slowing trade and weaker global demand, which undermines the WTI price. The Trump administration doubled tariffs on Indian imports to 50%, citing India's refusal to stop buying Russian crude and defence hardware.
Trump on Monday criticized the tariff and trade relationship between the US and India, saying it has been heavily one-sided for decades. His comments came after India's Prime Minister Narendra Modi strengthened relationships with China and Russia amid deteriorating relations with the US.
However, concerns that intensifying airstrikes in Russia and Ukraine could lead to supply disruptions might cap the downside for the WTI. Ukrainian President Volodymyr Zelenskiy on Sunday vowed to retaliate against Russian drone strikes on power facilities in his country's north and south and ordered more attacks deep inside Russia, per Reuters. US President Donald Trump threatened to impose additional sanctions on Russia if no progress is made in peace talks with Ukraine.
Additionally, rising bets of a Federal Reserve (Fed) rate cut this month might weigh on the US Dollar (USD) and underpin the USD-denominated commodity price. Traders are now pricing in nearly an 89% chance of a 25 basis points (bps) rate cut by the Fed at the September policy meeting, up from 85% odds before the US PCE data, according to the CME FedWatch tool.
Source: FXstreet
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