U.S. consumers’ outlook on inflation was little changed last month as households upgraded their views on the state of their finances and ability to get credit, according to a report released on Tuesday by the New York Federal Reserve.
Central banks like the U.S. Fed use interest rates to keep inflation in check. Lower interest rates can spur economic growth and demand for oil by reducing consumer borrowing costs.
The U.S. will produce less oil in 2025 than previously expected as declining oil prices have prompted U.S. producers to slow activity this year, according to the latest U.S. Energy Information Administration outlook.
In Asia, meanwhile, powerhouse economies Japan and South Korea said on Tuesday they would try to negotiate with the U.S. to soften the impact of sharply higher tariffs that U.S. President Donald Trump now plans to impose from the start of August.
Trump ramped up his trade war again on Monday, telling 14 nations that they would face tariffs ranging from 25% for countries including Japan and South Korea, to 40% for Laos and Myanmar. Trump’s tariffs have raised uncertainty across the market and concerns that they could have a negative effect on the global economy and oil demand.
In Germany, the biggest economy in Europe, exports fell more than expected in May, data showed on Tuesday, as demand from the U.S. dropped for the second consecutive month due to the impact of tariffs.
As highlighted in last week’s blog, while prices seem to be pressured by OPEC+ unwinding its voluntary output cuts, tightness in middle distillates and Houthi attacks on cargo ships are supporting the market, said Janiv Shah, an analyst at energy consultancy Rystad Energy.
Last Saturday, the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and its allies, like Russia, agreed to raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd increases in the previous three months.
The producer group is set to approve an increase of about 550,000 bpd for September when it meets on August 3, sources told Reuters, which would unwind all of the cuts.
Fuel card prices will rise between 2 – 2.5 pence per litre for next week.
