TOKYO: Oil prices dropped on Thursday as the latest tariff announcements by U.S. President Donald Trump were perceived by market participants to threaten global economic growth and demand for the resource.
Brent crude futures were down 22 cents, or 0.31%, at $69.97 a barrel by 0052 GMT. U.S. West Texas Intermediate crude lost 27 cents, or 0.39%, to $68.11 a barrel.
On Wednesday, Trump threatened Brazil, Latin America's largest economy, with a punitive 50% tariff on exports to the U.S., after a public spat with his Brazilian counterpart Luiz Inacio Lula da Silva.
Earlier, Trump announced plans about tariffs on copper, semiconductors and pharmaceuticals and his administration sent tariff letters to the Philippines, Iraq and others, adding to over a dozen of letters issued earlier in the week including for powerhouse U.S. suppliers South Korea and Japan.
As policymakers remain worried about the inflationary pressures from Trump's tariffs, only "a couple" of officials at the Federal Reserve's June 17-18 meeting said they felt interest rates could be reduced as soon as this month, the minutes released on Wednesday showed.
Higher interest rates make borrowings more expensive and reduce demand for oil.
Providing some support to prices, U.S. crude stocks rose while gasoline and distillate inventories fell last week, the Energy Information Administration said on Wednesday. Gasoline demand rose 6% to 9.2 million barrels per day last week, the EIA said.
Global daily flights were averaging 107,600 in the first eight days of July, its all-time high, with flights in China reaching a five-month peak with port and freight activities indicating 'sustained expansion' in trade activities from last year, J.P. Morgan said in a client note.
"Year to date, global oil demand growth is averaging 0.97 million barrels per day, in line with our forecast of 1 million barrels per day," the note said. - Reuters
