WTI extends downside to near $62.50 as traders brace for potential US-Russia talks

• WTI price remains under selling pressure around $62.50 in Monday's early European session. 
• Oil traders await the outcome of talks between the US and Russia later on Friday on the war in Ukraine.
• Trump's higher tariffs could weigh on economic activity and drag the WTI lower. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.50 during the early European trading hours on Monday. The WTI extends the decline near the lowest since June amid optimism over the proposed United States (US)-Russia meeting. Oil traders await the American Petroleum Institute (API) Crude Oil stockpiles report, which will be released later on Tuesday. 

US President Donald Trump said last week that he would meet Russian President Vladimir Putin in Alaska on Friday to discuss the Ukraine issue. This announcement came after Trump threatened to impose higher tariffs on buyers of Russian oil. "If we do see some level of de-escalation, it would remove sanction risk from the oil market. This would likely drive prices lower, given the bearish fundamentals," said Ewa Manthey, Commodities Strategist. 

Furthermore, Trump's higher tariffs on imports from dozens of countries, which took effect on Thursday, could fuel concerns over weaker global economic activity and undermine the WTI price. Goods from the EU, Japan and South Korea are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. Trump also expects the EU, Japan and South Korea to invest hundreds of billions of dollars in the United States.

Oil traders will also take more cues from the US Consumer Price Index (CPI) inflation data for July, which is due later on Tuesday. If the reports show softer-than-expected outcomes, this could weigh on the US Dollar (USD) and boost the USD-denominated commodity price.