Oil prices rise due to optimism about US trade talks
24 July 08:46
On Thursday, oil prices rose amid optimistic sentiment about US trade talks that could ease pressure on the global economy, as well as a larger-than-expected decline in US oil stocks. This was reported by "Komersant Ukrainian" with reference to Reuters.
Futures for Brent crude oil rose by 21 cents, or 0.3%, to $68.72 per barrel as of 06:35 Kyiv time. Futures for U.S. WTI crude oil rose 22 cents, or 0.3%, to $65.47 per barrel.
The US and its deals
Both benchmarks were little changed on Wednesday as markets watched the development of trade talks between the US and the European Union following the US-Japan tariff agreement. The agreement calls for lower tariffs on auto imports and exemptions for Tokyo from new fees in exchange for a $550 billion package of U.S. investments and loans.
“The buying was driven by optimism that progress in tariff talks with the US will help avoid the worst-case scenario. However, uncertainty over the US-China trade talks as well as peace talks between Ukraine and Russia are limiting further growth,”
– said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, predicting that WTI is likely to remain in the range of $60 to $70.
Two European diplomats said Wednesday that the EU and the US are closing in on a trade deal that could include a 15% US tariff on EU goods and possible exemptions, potentially paving the way for another major trade deal after the agreement with Japan.
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Energy reserves in the United States
On the supply side, data from the U.S. Energy Information Administration showed that U.S. crude oil inventories fell by 3.2 million barrels to 419 million barrels last week, exceeding analysts’ expectations of a 1.6 million barrel decline.
Gasoline stocks also fell by 1.7 million barrels to 231.1 million barrels, almost double the expectation of a 908 thousand barrel decline. Stocks of distillates, including diesel and fuel oil, rose by 2.9 million barrels over the week to 109.9 million barrels, which is still near the lowest seasonal level since 1996, ANZ analysts said.
“This suggests that demand has been relatively strong over the summer in the northern hemisphere,”
– ANZ noted.
russia and Ukraine
Meanwhile, geopolitical tensions remain in the spotlight.
Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner exchanges, although the two sides remain far apart on the terms of a ceasefire and a possible meeting between their leaders.
Separately, foreign oil tankers have been temporarily banned from loading at Russia’s main Black Sea ports due to new regulations, two industry sources said Wednesday, effectively halting exports from Kazakhstan through a consortium partly owned by U.S. energy giants.
The US Energy Secretary said Tuesday that the US will consider sanctions against Russian oil to end the war in Ukraine. Meanwhile, the EU on Friday approved its 18th package of sanctions against Russia, lowering the price cap on Russian oil.
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