July 17 (UPI) -- Oil prices tread water Tuesday ahead of the start of U.S. trading from a European-Japanese trade agreement, offsetting headwinds from supply commitments.
Crude oil prices fell dramatically on Monday on commitments from major oil suppliers and a report from the International Monetary Fund on fragility in the global market. The price for Brent crude oil, the global benchmark, dropped 4.6 percent Monday, on the back of a 6 percent decline last week.
Global economic tensions from trade disputes could undermine growth and crimp demand for oil.
"The recently announced and anticipated tariff increases by the United States and retaliatory measures by trading partners have increased the likelihood of escalating and sustained trade actions," the IMF's report read. "These could derail the recovery and depress medium-term growth prospects, both through their direct impact on resource allocation and productivity and by raising uncertainty and taking a toll on investment."
On Tuesday, a possible counteraction was realized in Tokyo when Japanese and European leaders signed off on a trade agreement that contrasted U.S. trade policies. Addressing Japanese Prime Minister Shinzo Abe, European President Jean-Claude Juncker said open doors would create win-win situations for trading partners.
"As far as we are concerned, there is no protection in protectionism -- and there is no unity where there is unilateralism," he said in his prepared remarks.
Crude oil prices were mixed ahead of the start of U.S. trading. The price for Brent crude oil was up 0.1 percent as of 9:15 a.m. EDT to $71.91 per barrel. West Texas Intermediate, the U.S. benchmark for the price was oil, was charting new territory with a decline of 0.48 percent to $66.75 per barrel.
U.S. crude oil production is accelerating, but remains locked in because of a shortage of available pipeline capacity. That capacity may be impeded by U.S. tariffs on imported steel.
Speaking alongside U.S. President Donald Trump in Helsinki, Russian President Vladimir Putin offered assurances Monday about stability for the oil market.
"We are not interested in a sharp drop in prices below the lower limit," he said. "We are not interested in excessively high prices either, because they can kill refining, engineering and other branches of the economy."
Russia sits on a committee monitoring compliance with a plan steered by the Organization of Petroleum Exporting Countries to keep supply levels balanced with demand.