Written by The Banking Post
July 24 (Reuters): Oil prices rose slightly on Thursday, supported by growing optimism over US-led trade negotiations and a sharper-than-expected fall in US crude inventories.
Brent crude futures rose by 21 cents, or 0.3%, to $68.72 per barrel as of 0335 GMT, while US West Texas Intermediate (WTI) gained 22 cents to reach $65.47 per barrel.
Markets were steady on Wednesday as traders tracked developments in US–EU trade talks. This follows President Donald Trump’s agreement with Japan, which slashes auto tariffs in exchange for a $550 billion investment package from Tokyo.
“Buying was driven by optimism that progress in tariff negotiations with the US would help avoid a worst-case scenario,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
However, he cautioned that ongoing US-China tensions and Russia-Ukraine peace uncertainties may cap further gains. WTI is expected to remain range-bound between $60 and $70, he added.
Supply-Side Boost from Inventory Data
US Energy Information Administration (EIA) data showed that crude inventories fell by 3.2 million barrels last week to 419 million — double analysts’ expectations of a 1.6 million-barrel draw.
Gasoline stocks also dropped by 1.7 million barrels to 231.1 million, far surpassing forecasts. However, distillate inventories, which include diesel and heating oil, rose by 2.9 million barrels, though they remain near seasonal lows not seen since 1996, ANZ analysts noted.
“This suggests demand over the northern hemisphere summer has been relatively strong,” ANZ said in a client note.
Geopolitical Risks Remain
Geopolitical developments continue to influence market sentiment. Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing prisoner exchanges, though progress on a ceasefire remains limited.
Additionally, new regulations at Russia’s Black Sea ports temporarily barred foreign tankers from loading, disrupting exports from Kazakhstan via a pipeline consortium involving US energy companies.
Meanwhile, the US energy secretary hinted at possible sanctions on Russian oil, and the EU has approved its 18th sanctions package, including a revised price cap on Russian crude.
