Last week, oil prices faced pressure due to concerns regarding oversupply and weakness in the economies of the U.S. and China.
Oil Price Dynamics
On Friday, oil prices retreated again, with Brent down 74 cents to $68.44 per barrel and WTI slipping 87 cents to $65.16. These levels had not been seen since early July and late June, respectively. Over the week, Brent lost about 1% and WTI saw a 3% decline as traders focused on oversupply and weak demand signals.
Dollar Exchange Rate and Economic Data
Throughout the week, the U.S. dollar managed to gain slightly on Friday due to positive economic numbers, but it was not enough to offset earlier losses. The dollar index, which tracks the greenback against six major currencies, stood at 97.45, down 0.75% for the week. Retail sales in the U.K. also fell short of expectations, while the yen weakened in Japan following soft inflation data.
Political Pressure on the Fed and Tariffs on Russian Oil
The political climate intensified after U.S. President Donald Trump reiterated his call for lower interest rates during a press conference. He also floated the idea of imposing 100% tariffs on countries continuing to import Russian oil unless a peace deal with Ukraine is reached within 50 days. While such measures are unlikely to significantly impact global prices, they add uncertainty to the market.
Amid weak macro signals and political instability, markets are bracing for uncertainty next week, as central bank decisions and the influence of new tariffs may significantly affect oil prices.
