Oil prices steady but head for deep weekly losses amid tariffs, supply concerns

Investing.com-- Oil prices moved little in Asian trade on Friday, but were nursing a sharp weekly loss amid concerns over a tariff-driven cooling in demand and a looming supply glut.

Crude prices took fleeting support from U.S. President Donald Trump outlining more restrictions on Russia’s oil industry, specifically his imposition of steep tariffs on India. Trump’s reciprocal tariffs on major trading partners took effect from Thursday, pushing up concerns over increased economic disruption across the globe, which could in turn hurt oil demand. 

Some resilience in the dollar also weighed on crude, amid heightened speculation over who could succeed Federal Reserve Chair Jerome Powell. 

Brent oil futures for October steadied at $66.43 a barrel, while West Texas Intermediate crude futures steadied at $63.03 a barrel by 21:41 ET (01:41 GMT). Both contracts were down between 4% and 5% this week.

Oil headed for worst week since late-June amid supply, demand concerns

Oil’s deep losses this week were driven by heightened concerns over slowing demand, especially as global economies grapple with increased U.S. trade tariffs.

Recent signs of a cooling U.S. labor market also sparked concerns over weakening demand in the country, although a sustained draw in inventories helped somewhat offset this notion.

On the supply front, oil prices were still reeling from the OPEC+ hiking its production quota again in September, as the cartel steadily unwinds about three years of supply cuts.

Russia-Ukraine diplomacy also weighs 

Russia confirmed on Thursday that President Vladimir Putin will meet Trump in the coming days, amid repeated calls from Trump and the West for an end to the Russia-Ukraine conflict.

The war, which has been ongoing for over three years, provided some support to oil markets on expectations of tighter Russian supplies. But a potential ceasefire stands to offset this notion. 

While the U.S. did impose strict sanctions against Russia’s oil industry, it has so far done little to limit global supplies.

Trump this week slapped India with as much as 50% trade tariffs over its buying of Russian oil, and also threatened to tariff top buyer China. 

The move provided only fleeting support to oil prices.