Oil prices rose on Thursday, buoyed by optimism over U.S. trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in U.S. crude inventories.
Brent crude futures gained 54 cents, or 0.8%, to $69.05 a barrel by 0800 GMT. U.S. West Texas Intermediate crude futures climbed 58 cents, or 0.9%, to $65.83 per barrel.
Two European diplomats said on Wednesday that the EU and the U.S. are moving toward a trade deal that could include a 15% U.S. baseline tariff on EU goods and possible exemptions, potentially paving the way for another major trade agreement following the Japan deal.
“Buying was driven by optimism that progress in tariff negotiations with the U.S. would help avoid a worst-case scenario,” said Hiroyuki Kikukawa, chief strategist of Nissan (OTC:NSANY) Securities Investment, a unit of Nissan Securities.
Meanwhile, news of issues in loading CPC exports from Kazakhstan through the Black Sea due to Russian administrative interference, along with reports of contamination around loadings for Azeri crude from Ceyhan in Turkey led to some strength, PVM Associates analyst John Evans said in a note.
But follow-through will depend on their longevity, he added.
Kazakhstan’s energy ministry however said that the country had not halted oil loadings via the Russian sea ports, the Interfax news agency reported earlier on Thursday.
“Uncertainty over U.S.-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains,” Kikukawa at Nissan Securities said, predicting WTI would likely remain range-bound between $60 and $70 a barrel.
Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders.
On the supply side, U.S. Energy Information Administration data showed U.S. crude inventories fell last week by 3.2 million barrels to 419 million barrels, exceeding analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.
Source: Reuters