Oil prices plummeted on Tuesday (July 23) for the third straight session, as hopes for a trade deal between the U.S. and Europe faded, fueling concerns of an economic slowdown in the world's largest oil market.

Brent crude futures fell 82 cents, or 1.2%, to $68.39 a barrel at 1:59 p.m. EDT. U.S. West Texas Intermediate crude for August delivery, which expires on Tuesday, fell $1.05, or 1.6%, to $66.15 a barrel.

The more active September WTI contract fell 87 cents, or 1.3%, to $65.08 a barrel. The European Union is exploring a broader range of possible retaliatory measures against the U.S. as prospects for an acceptable trade agreement with Washington fade, EU diplomats told Reuters.

US President Donald Trump has set an August 1 deadline for countries to secure a trade deal or face steep tariffs. He has threatened to impose 30% tariffs on European Union imports if a deal is not reached.

"The tariff factor appears to be coming into greater focus as the US deadline approaches," analysts at energy advisory firm Ritterbusch and Associates said in a note.

The prospect of an interim trade deal between the US and India before that deadline has also dimmed, two Indian government sources told Reuters. Diesel saw the biggest decline across the energy complex, reflecting economic concerns. This industrial fuel, used mostly in manufacturing, construction, and heavy transportation, has been the best performer in the oil market over the past few weeks due to tight global supplies.

US ultra-low-sulfur diesel futures fell nearly 3% on Tuesday to $102.50 a barrel.

However, the decline in crude oil prices may be limited by the possibility that the US could reduce or even delay its threatened tariffs, Ritterbusch and Associates said. Meanwhile, a Reuters poll of analysts showed U.S. crude oil inventories likely fell by around 600,000 barrels in the week to July 18. (alg)

Source: Reuters