WTI crude oil futures dropped more than 1% to around $65.1 per barrel on Tuesday, as persistent uncertainty over trade negotiations fanned fears about the demand outlook. Investors are closely watching EU-US trade talks this week as they seek to strike a deal before the August 1 deadline—when President Donald Trump has threatened to hit most of the bloc’s exports with 30% tariffs. At the same time, the bloc is stepping up preparations to strike back if the two sides fail to secure a deal. Supply-side pressures have also emerged, as OPEC+ unwind production cuts. Data released on Monday showed that Saudi Arabia's crude exports rose to a three-month high in May. Elsewhere, Iran announced on Monday that it will resume nuclear talks with European powers this week in an effort to revive the 2015 nuclear deal and avoid the reimposition of international sanctions.
US natural gas futures dropped below $3.3/MMBtu, reversing some of last week’s 7% gain, as strong supply and a softer demand outlook pressured prices. Production is at a new record, averaging 107.0 billion cubic feet per day (bcf/day) so far in July, surpassing June’s previous high of 106.4 bcf/day. This surge in output allowed energy firms to inject 46 bcf into storage for the week ending July 11, far above both the 18 bcf added during the same week last year and the five-year average of 41 bcf. As a result, total gas inventories are now 6.2% above the seasonal norm. On the export front, LNG shipments are picking up, with flows to terminals averaging 15.8 bcf/day in July so far, up from 14.3 bcf/day in June, as facilities gradually return from maintenance and unplanned outages.
