Oil prices rose on Thursday, supported by optimism surrounding U.S. trade negotiations that could ease pressure on the global economy, along with a much larger-than-expected drop in U.S. crude inventories.
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As of 00:32 GMT, Brent crude futures were up 24 cents, or 0.4%, at $68.75 per barrel. U.S. West Texas Intermediate (WTI) crude futures also rose by 25 cents, or 0.4%, to $65.50 per barrel.
Both benchmark crude prices saw little change on Wednesday, as markets monitored developments in trade talks between the United States and the European Union, following a tariff agreement reached by U.S. President Donald Trump with Japan.
The agreement reduces tariffs on car imports and exempts Tokyo from new duties in exchange for an investment and loan package worth $550 billion.
Hiroyuki Kikukawa, chief analyst at Nissan Securities, said, “Buying is driven by optimism that progress in tariff negotiations with the United States will help avoid the worst-case scenario.”
He added, “However, uncertainty in U.S.-China trade talks and the peace negotiations between Ukraine and Russia are limiting further gains.”
Kikukawa expects WTI crude to remain within the $60 to $70 per barrel range.
Two European diplomats stated on Wednesday that the EU and the U.S. are close to finalizing a trade agreement that may include a 15% U.S. tariff on certain EU goods and potential exemptions, paving the way for another major trade deal following the Japan agreement.
On the supply side, data from the U.S. Energy Information Administration showed crude oil inventories dropped by 3.2 million barrels last week to 419 million barrels—more than double analysts’ expectations of a 1.6 million barrel decline in a Reuters poll.
Geopolitical tensions remained in focus as Russia and Ukraine held peace talks in Istanbul and discussed further prisoner exchanges. However, the two sides remain far from agreeing on a ceasefire or a potential meeting between their leaders.
Separately, two sources reported that foreign oil tankers were temporarily barred from loading at major Black Sea ports in Russia due to new regulations, effectively halting exports from Kazakhstan, which are conducted through a consortium partially owned by major U.S. energy firms.
On Tuesday, the U.S. energy secretary said that the U.S. is considering imposing sanctions on Russian oil to end the war in Ukraine.
Meanwhile, the European Union approved its 18th sanctions package against Russia on Friday, which includes lowering the price cap on Russian crude oil.
Reuters
