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Oil prices slipped on Tuesday amid uncertainty about the global economic outlook following the US-EU trade deal, and as investors awaited the US Federal Reserve's interest rate decision.
Brent crude futures were down 6.0 cents, or 0.1 per cent, to $69.98 a barrel at 0425 GMT, while US West Texas Intermediate crude was at $66.60, down 11 cents, or 0.2 per cent.
Both contracts settled more than 2.0 per cent higher in the previous session, and Brent touched its highest level since July 18 on Monday, according to Reuters.
The trade agreement between the United States and the European Union, while imposing a 15 per cent import tariff on most EU goods, sidestepped a full-blown trade war between the two major allies that would have rippled across nearly a third of global trade and dimmed the outlook for fuel demand.
The agreement also calls for $750 billion of EU purchases of US energy in the coming years, which analysts say the EU has virtually no chance of meeting, while European companies are to invest $600 billion in the US over the course of President Donald Trump's second term.
While the US-EU trade deal finalisation came as a relief for global markets amid heightened uncertainty, the timeline and milestones targeted for the investments are unclear, said ANZ analysts in a note.
"We think the 15 per cent rate will pose headwinds to the Euro area's growth outlook but is unlikely to push the economy into recession."
Meanwhile, top economic officials from the US and China met in Stockholm on Monday for more than five hours of talks to resolve longstanding economic disputes at the centre of a trade war between the world's top two economies. The discussions are expected to resume on Tuesday.
Oil market participants are also awaiting the US Federal Open Market Committee meeting on July 29-30, where the Fed is widely expected to hold rates but could signal a dovish tilt amid signs of cooling inflation, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
"Momentum favors the upside in the near term, but the market is vulnerable to volatility triggered by central bank surprises or a breakdown in trade negotiations," said Sachdeva.
"The likelihood of an economic slowdown and the Federal Reserve's potential rate cuts remain uncertain, limiting the upside in oil."
Meanwhile, Trump set a new deadline on Monday of "10 or 12 days" for Russia to make progress toward ending the war in Ukraine or face sanctions. Trump has threatened sanctions on both Russia and buyers of its exports unless progress is made.