Oil prices have experienced an uptick, influenced by positive trade developments and apprehensions regarding potential supply increases. Brent crude reached a one-week high, while U.S. West Texas Intermediate (WTI) crude also saw gains. This upward trend is largely attributed to recent trade agreements and inventory reports.
The U.S. and Japan have announced a trade agreement, which is expected to bolster economic growth and, consequently, oil demand. Additionally, the European Union is progressing toward a deal with the U.S., potentially involving a baseline tariff on imports. These developments have improved market sentiment, outweighing concerns about a potential rise in Venezuelan oil supply. The U.S. is considering easing sanctions to permit oil companies to operate in Venezuela, potentially boosting Venezuelan exports. Despite this, U.S. refiners might benefit due to current heavy crude shortages. Supporting the market further were significant U.S. crude inventory draws, exceeding expectations. These factors have contributed to the recent rise in oil prices.
Looking ahead, investors are closely monitoring upcoming economic data releases, including factory activity and employment figures, which are expected to further influence market dynamics.