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Thursday, August 07, 2025
What’s happening: Crude oil prices recovered this morning after falling to a six-week low during the previous session.
What happened: The latest report on US crude inventories lent support to oil prices.
Crude also received a boost from supply concerns after US President Donald Trump doubled tariffs on India due to its continued Russian oil imports.
Why it matters: Data released by the Energy Information Administration (EIA) on Wednesday showed that crude oil inventories in the US declined by 3.029 million barrels in the week ended August 1. This was significantly higher than market estimates of a decline of 1.1 million barrels. Among refined fuels, gasoline stockpiles fell by 1.323 million barrels last week, while inventories of distillate fuels contracted by 0.565 million barrels.
The White House announced a fresh 25% tariff on imports from India, which raised total US tariffs on the Asian nation to 50%. While Trump claimed that his additional tariff threat would force India to stop importing Russian oil, India said its decision would be based on the grade of crude, price, and other economic factors.
The fresh tariffs will take effect in 21 days, with the initial 25% levy expected to be implemented Thursday.
Trump said on Wednesday that talks between his special envoy Steve Witkoff and Russia’s President Vladimir Putin had been positive. However, Trump still threatened further sanctions on Moscow in case no moves are made to end the ongoing war in Ukraine.
Russia is the world’s second-biggest producer of crude after the US. Any agreement that reduces sanctions on Russia will result in a significant increase in crude supply in the global market.
Meanwhile, the world’s top oil exporter, Saudi Arabia, increased its crude prices for Asian buyers for a second month in a row, due to upbeat demand and tighter supply.
Brent crude futures declined 1.1% to settle at $66.89 a barrel on Wednesday, while WTI crude dipped 1.2% to close at $64.35 a barrel. Oil prices fell for the fifth straight day, with Brent settling at its lowest level since June 10 and WTI crude closing at its weakest level since June 5 on Wednesday.
Oil prices recovered this morning, with WTI crude gaining around 1% to trade at $64.94 a barrel and Brent crude rising 0.9% to $67.47 a barrel.
What to watch: Investors will continue monitoring tariff-related announcements by Donald Trump. Talks related to sanctions on Russia will also remain in focus.
Investors await the release of natural gas stockpiles data (1830 UAE Time) from the EIA today. US natural gas inventories, which surged by 48 billion cubic feet in the week ending July 25, are expected to rise by 10 billion cubic feet in the latest week.
Context: The CAD/USD forex pair edged higher this morning as investors assessed the latest economic reports.
Details: Data released on Wednesday showed that the S&P Global Canada composite PMI surged to 48.7 in July, from 44.0 in the previous month. Canada’s services PMI also rose to 49.3 in July, from 44.3 in June, signalling a much softer pace of contraction in the region’s services sector.
Strength in the price of crude oil, one of Canada’s major exports, lent support to the loonie this morning. WTI crude oil prices jumped around 1% to $64.94 a barrel.
However, strength in the US dollar weighed on the CAD/USD pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 98.19.
The CAD/JPY forex pair rose to 1.3739 this morning. The S&P/TSX Composite Index had jumped 1.27% to close at 27,920.87 on Wednesday.
What to watch: Investors await the release of economic data on Canada’s Ivey PMI (1800 UAE Time) today. The Ivey Purchasing Managers Index in Canada, which climbed to 53.3 in June from 48.9 in May, is expected to surge further to 55.2 in July.
Tariff-related announcements from the Trump administration are also expected to impact the CAD/USD pair ahead.
Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.18%, 0.73% and 1.29%, respectively.
Ukraine said that Russia had hit a gas facility in its southern Odesa region. The news sent the RUB/USD pair higher in forex trading this morning.
Australia’s trade surplus in goods rose to A$5.37 billion in June, from A$1.60 billion in the previous month. The latest reading also came in above market estimates of A$2.5 billion, lending support to the AUD/USD forex pair.
Brazil’s trade surplus jumped to $7.07 billion in July, from $5.89 billion in June. The latest reading topped market expectations of $5.6 billion, which sent the BRL/USD pair higher in forex trading this morning.
Eurozone’s retail sales rose 0.3% in June, recovering from a 0.3% decline in May, which lent support to the EUR/USD forex pair.
South Korea’s current account surplus widened to $14.27 billion in June, from $10.14 billion in the previous month. However, the KRW/USD pair edged lower in forex trading this morning.
Spain’s 10-year Obligacion auction (1240 UAE Time), 20-year Obligacion auction (1240 UAE Time), 3-year Bonos auction (1240 UAE Time) and 5-year Index-Linked Obligacion auction (1240 UAE Time), France’s 2034 OAT auction (1300 UAE Time), 2036 OAT auction (1300 UAE Time), 2045 OAT auction (1300 UAE Time) and 2055 OAT auction (1300 UAE Time), Singapore’s foreign exchange reserves (1300 UAE Time), Bank of England’s Interest rate decision (1500 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time) and Treasury cash balance (1830 UAE Time), Brazil’s PPI (1600 UAE Time), car production (1800 UAE Time) and new car registrations (1800 UAE Time), Mexico’s inflation rate (1600 UAE Time), auto exports (1600 UAE Time), auto production (1600 UAE Time) and interest rate decision (2300 UAE Time), US initial jobless claims (1630 UAE Time), nonfarm productivity (1630 UAE Time), unit labour costs (1630 UAE Time), continuing jobless claims (1630 UAE Time), wholesale inventories (1800 UAE Time), consumer inflation expectations (1900 UAE Time), 4-week Bill auction (1930 UAE Time), 8-week Bill auction (1930 UAE Time), 15-year Mortgage Rate (2000 UAE Time), 30-year Mortgage Rate (2000 UAE Time), 30-year Bond auction (2100 UAE Time) and consumer credit change (2300 UAE Time), Russia’s foreign exchange reserves (1710 UAE Time), Canada’s 10-year Bond auction (2000 UAE Time), as well as Argentina’s industrial production (2300 UAE Time).
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