Oil prices rose slightly on Friday as investors balanced signs of near-term market tightness against the possibility of a significant supply surplus this year, according to the International Energy Agency (IEA). Markets also turned their focus to U.S. tariffs and potential sanctions on Russia.

Brent crude futures rose by 40 cents, or 0.58%, to $69.04 a barrel by 10:27 GMT. U.S. West Texas Intermediate (WTI) crude climbed 45 cents, or 0.68%, to $67.02 a barrel.

At these levels, Brent is set to record a weekly gain of about 1.1%, while WTI remains largely unchanged from last week’s close.

The International Energy Agency said Friday that the global oil market may be tighter than it appears, driven by surging demand from peak summer refinery operations to meet travel and electricity generation needs.

September Brent contracts are currently trading at a $1.10 premium over October contracts, indicating tightness in near-term supply.

John Evans, analyst at PVM, wrote in a note on Friday: "Civilians, whether in the air or on the roads, are demonstrating a strong desire to travel."

Short-Term Tightness vs Long-Term Surplus

Despite current tightness, the IEA raised its forecast for oil supply growth this year while trimming its demand outlook — a signal that the market could swing into surplus.

Commerzbank analysts wrote in a note: "OPEC+ will increase output rapidly and aggressively. There is a risk of a significant oversupply. Still, oil prices are receiving short-term support."

One sign of near-term demand strength: Saudi Arabia is preparing to ship around 51 million barrels of crude to China in August — the largest shipment of its kind in over two years.

However, looking further ahead, OPEC has lowered its forecast for global oil demand between 2026 and 2029, citing slower growth in China, according to its annual "World Oil Outlook 2025" report released Thursday.

Tariffs and Sanctions Add to Market Jitters

Both benchmark oil contracts had fallen over 2% on Thursday, as investors grew nervous about the impact of President Trump’s unpredictable tariff policies on global economic growth and oil demand.

Analysts at ING wrote in a note to clients: "Prices recovered some losses after President Trump said he plans to make a ‘major announcement’ about Russia on Monday — a statement that could stir fears of new sanctions on Moscow."

Trump has recently voiced frustration with Russian President Vladimir Putin over the lack of progress in peace efforts with Ukraine and the intensifying bombardment of Ukrainian cities.

Meanwhile, in Brussels, the European Commission is preparing to propose a flexible price cap on Russian oil this week as part of a new sanctions package.

The U.S. dollar rose on Friday, supported by escalating global trade tensions after President Donald Trump announced new tariffs on imports, including a 35% levy on neighboring Canada, along with plans to impose broad tariffs of 15% or 20% on most of the United States’ trading partners.

The latest trade blow to Canada came as a surprise to investors, who had expected Ottawa to reach a new economic and security agreement with Washington.

The Canadian dollar fell 0.22% to 1.369 CAD per U.S. dollar, after an initial drop of over 0.5% immediately following Trump's tariff announcement, which is expected to take effect on August 1.

The euro also declined 0.1% to 1.1688 dollars, heading for a weekly loss of 0.9%, after Trump said the European Union may receive a letter specifying the new tariff rates by Friday, raising doubts over the progress of trade talks between Brussels and Washington.

Piotr Matys, senior FX strategist at InTouch Capital Markets, said: "Officials in many countries who have been negotiating in good faith with the Trump administration may now wonder whether the president will raise the bar — as he did with Canada — in the final moments of the talks."

Although market reaction to this latest wave of tariffs was limited compared to the heavy selling seen in April on “Liberation Day,” concerns still linger among investors regarding the future of global trade and whether the August 1 deadline is truly final.

These concerns worked in favor of the U.S. dollar, which rose 0.2% against a basket of currencies to reach 97.79, on track to record its biggest weekly gain since February, with a 0.8% increase.

The dollar was also supported by:

- Data showing the resilience of the U.S. labor market.

- The minutes of the latest Federal Reserve policy meeting, which tempered market expectations for an imminent interest rate cut.

Matys added: "Most investors see this recent dollar rally as a short-term corrective rebound, not a lasting reversal. President Trump’s policies have undermined the dollar’s status as the world’s premier reserve currency."

Despite the current rally, the dollar index remains down 9% since the start of the year, amid concerns that upcoming data could reflect the negative effects of Trump’s policies on the world’s largest economy.

Tariff Impact on Other Currencies

The Japanese yen fell 0.41% to 146.91 per dollar, heading for a weekly loss of about 1.5%, after Trump imposed a 25% tariff on Japan earlier this week.

The Brazilian real, which traded at 5.532 per dollar, is on track for a 2% weekly loss — its biggest drop in about five months — after Trump surprised Brazil by adding it to the tariff list.

President Luiz Inácio Lula da Silva said he is seeking a diplomatic solution to the tariff crisis but pledged a reciprocal response if the tariffs are enacted on August 1.

The British pound dropped 0.31% to 1.3538 dollars, approaching its lowest level in two weeks, after the U.K. economy unexpectedly contracted for a second consecutive month in May.

Bitcoin Hits New Record Above $118,000

In contrast, cryptocurrencies posted strong gains, driven by increasing institutional demand and supportive U.S. policies toward digital assets.

Bitcoin rose 3.7% to a new all-time high of $118,407.96.

Ethereum jumped 5.7% to $2,980.15.

Zhang Wei Liang, currency and credit strategist at DBS Bank, said: "This new record reflects the resilience of global risk appetite despite Trump’s tariffs, and also shows strong optimism regarding the crypto legislation expected to be discussed during what is being called ‘Crypto Week’ in Congress."

Gold prices rose in the European market on Friday, marking a third consecutive day of gains as safe-haven buying intensified following U.S. President Donald Trump's announcement of a new round of tariffs.

The upside for the precious metal was capped by a stronger U.S. dollar in the forex market, amid growing signs of turmoil in global trade.

Expectations of a U.S. interest rate cut in September have increased after the minutes from the latest Federal Reserve meeting strengthened speculation of policy easing before year-end.

The Price

• Gold prices today: Gold rose by 0.6% to $3,343.88 per ounce, up from an opening level of $3,323.99, with an intraday low of $3,321.87.

• On Thursday, gold settled with a 0.3% gain, its second straight daily rise, supported by Trump’s tariff actions.

U.S. Dollar

The U.S. Dollar Index climbed 0.35% on Friday, posting its second consecutive daily gain and nearing a two-week high of 97.92 points, reflecting persistent strength against a basket of major and minor currencies.

As is well known, a stronger dollar makes dollar-priced bullion less attractive to holders of other currencies.

Trump Tariffs Shake Trade Outlook

Global trade chaos escalated after President Trump announced additional tariffs, stating his intention to impose broad-based duties of 15% or 20% on most of the United States’ trade partners.

Trump confirmed a 35% tariff on goods imported from Canada. In a post on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs will take effect on August 1 and may increase if Canada retaliates.

He also said the European Union could receive a tariff notice by Friday, casting doubt over the progress of U.S.-EU trade talks.

Brazilian President Luiz Inácio Lula da Silva said he hopes for a diplomatic solution to Trump’s threat of a 50% tariff on Brazilian imports, but vowed to respond in kind if the tariffs are enacted on August 1.

Trump additionally threatened a 50% tariff on imported copper and reiterated his intention to target semiconductors and pharmaceuticals with new tariffs.

U.S. Interest Rates

The minutes of the latest Federal Reserve meeting showed that most policymakers believed rate cuts would be appropriate later this year.

Following these details, and according to the FedWatch tool from CME Group, the probability of a 25 basis-point rate cut at the July meeting rose from 5% to 8%, while the probability of leaving rates unchanged fell from 95% to 92%.

The probability of a 25 basis-point rate cut at the September meeting increased from 62% to 72%, while the probability of keeping rates unchanged dropped from 38% to 28%.

Gold Outlook

• Tim Waterer, Chief Market Analyst at KCM Trade, said: “Despite the escalation of Trump’s tariff wars, gold hasn’t received the level of support it once did, as investors have grown accustomed to both the tariff narrative and Trump’s policymaking style.”

• He added that the simultaneousrise of the U.S. dollar and gold may have limited the precious metal’s upside.

SPDR Gold Trust

Holdings in the SPDR Gold Trust—the world’s largest gold-backed ETF—rose by 1.44 metric tons on Thursday, marking a second consecutive daily increase. Total holdings now stand at 948.81 metric tons, the highest since June 30.

The euro declined in the European market on Friday against a basket of global currencies, extending its losses for a third consecutive day against the U.S. dollar and nearing a two-week low, putting it on track for a weekly loss. The decline comes amid expectations that the European Union will receive a formal U.S. tariff letter later today.

Recent core inflation data from Europe has increased uncertainty around the likelihood of a European rate cut in July, as investors await further key economic indicators from the eurozone.

The Price

- EUR/USD today: The euro fell 0.3% to $1.1664, down from the opening price of $1.1699, after hitting a session high of $1.1707.

- The euro ended Thursday down roughly 0.2% against the dollar, its second straight daily loss, after touching a two-week low at $1.1662.

Weekly Performance

Over the course of the week, which officially concludes at Friday’s settlement, the euro is down about 0.9% against the U.S. dollar. This puts the common currency on track for its first weekly loss in three weeks, driven by profit-taking after reaching a four-year high of $1.1830.

U.S. Dollar

The U.S. dollar index rose 0.35% on Friday, extending gains for a second session and approaching a two-week high at 97.92 points, reflecting continued strength in the greenback against a basket of major and minor currencies.

The dollar’s rise comes amid mounting signs of disruption in global trade, after President Donald Trump announced additional tariffs. He said he intends to impose blanket tariffs of 15% or 20% on most of America’s trading partners.

Trump also confirmed a 35% tariff on goods imported from Canada. In a message posted on Truth Social, he informed Canadian Prime Minister Mark Carney that the new tariffs would take effect on August 1 and could increase further if Canada retaliates.

Potential Tariffs on the European Union

Trump stated on Thursday that the European Union may receive a formal tariff letter by Friday, casting fresh doubt over the progress of trade talks between Washington and Brussels.

Earlier this week, European sources familiar with the matter told Reuters that the EU might not receive a tariff letter and could potentially be granted exemptions from the 10% U.S. base tariff.

European Interest Rates

- The eurozone’s headline consumer price index rose 2.0% year-on-year in June, in line with market expectations, after a 1.9% increase in May.

- According to Reuters sources, a clear majority at the latest European Central Bank meeting favored keeping interest rates unchanged in July, with some members even calling for a longer pause.

- Current money market pricing suggests a 30% probability of a 25-basis-point rate cut by the ECB in July.

- To reprice those odds, investors will be closely watching upcoming economic data from across the eurozone, as well as remarks from ECB policymakers.