Oil prices were little changed on Friday (August 1st) and headed for weekly gains, as investors weighed the impact of further tariffs and sanctions from US President Donald Trump.

Brent crude futures rose 19 cents, or 0.26%, to $71.89 per barrel at 08:23 GMT. US West Texas Intermediate crude futures rose 20 cents, or 0.29%, to $69.46 per barrel. Oil prices stabilized on Friday after falling more than 1% in the previous session. However, for the week, Brent is expected to rise 5%, and WTI around 6.6%.

Investors have been focused on the potential impact of US tariffs on oil prices this week, as tariffs on US trading partners are set to take effect on August 1st.

Trump signed an executive order on Thursday imposing tariffs ranging from 10% to 41% on US imports from dozens of foreign countries and territories, including Canada, India, and Taiwan, that failed to reach a trade deal before the August 1 deadline.

Partners that did reach a trade deal include the European Union, South Korea, Japan, and the United Kingdom. "We think the conclusion of a trade deal that is more or less satisfactory to the market, with a few exceptions, has been the main driver of the oil price rally in recent days, and further progress in trade negotiations with China in the future could provide further confidence boost for the oil market," said Suvro Sarkar, head of the energy sector team at DBS bank.

Prices were also supported this week after Trump threatened to impose 100% secondary tariffs on buyers of Russian crude in an attempt to pressure Russia to halt its war against Ukraine, sparking concerns about potential disruptions to oil trade flows and the withdrawal of some oil from the market.

J.P. Morgan analysts said in a note on Thursday that Trump's warning to China and India about sanctions on ongoing Russian oil purchases could jeopardize Russia's 2.75 million barrels per day of seaborne oil exports. The two countries are the world's second- and third-largest consumers of crude oil, respectively.

However, some analysts remain concerned that U.S. levies will limit economic growth by raising prices, which could weigh on oil demand.

On Thursday, there were signs that existing tariffs were pushing prices higher in the U.S., the world's largest economy and oil consumer, according to June inflation data. (alg)

Source: Reuters