Oil nudged lower following its first weekly drop this month, with traders focused on US tariff talks and the European Union's efforts to curb Russian energy exports. 

West Texas Intermediate crude fell 1% to trade below $67 a barrel, after slipping 1.6% last week. EU envoys are set to meet as early as this week to formulate a plan to respond to a possible no-deal scenario with US President Donald Trump, whose position is seen to have stiffened ahead of an Aug. 1 deadline.

Late last week, the 27-nation bloc agreed on a package of sanctions against Moscow, including a lower price cap on the country's crude and a ban on a large refinery in India. Still, restrictions on Russian diesel won't fully come into effect until January. 

Beijing — with two Chinese banks and other companies included in the sanctions — protested the EU measures and said it will take the necessary steps to resolutely "safeguard the legitimate rights and interests of Chinese firms and financial institutions."

China and India became the main buyers of Russian crude when global flows were reshaped following the Kremlin's 2022 invasion of Ukraine. The shipments have so far not been impeded by western restrictions. 

The US benchmark crude future's upcoming August expiry on Tuesday also contributed to choppy trading.

Oil has trended higher since early May, but WTI is still down for the year as Trump ratchets up his trade war and OPEC+ relaxes supply curbs. Prices have been jolted by developments in the Middle East, as well as sanctions on crude from producers including Russia and Iran. 

"In the absence of catalysts, the path of least resistance could be lower," said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.

Diesel's price relative to crude in Europe, a gauge for profitability of producing the fuel, was near the highest since early 2024, while its prompt time spread — the difference between its closest two contracts — also rallied on Friday, widening its bullish backwardation structure. 

WTI for August delivery, which expires Tuesday, edged lower to $66.68 a barrel at 10:46 a.m. in New York.

The more active September contract traded at $65.40 a barrel

Brent for September settlement slid 1% to $68.60 a barrel.

Source : Bloomberg