Oil Prices Increase as US Inventories Decline by 0.8%
Oil prices climbed during early trading hours on Thursday as US inventories fell amidst global trade uncertainties and a weakening dollar.
The market also reacted to US President Donald Trump’s disclosure that America may reach a tariff agreement with trading partners after success achieved with Japan, with hope that the EU and India, among others, will find a deal.
The international benchmark Brent crude increased around 0.3% to $68.27 per barrel, up from $68.06 at the previous session’s close. The US benchmark West Texas Intermediate (WTI) crude rose by 0.32% to $65.49 per barrel, compared to $65.28 in the prior session.
Prices re supported by reports that Washington and Brussels are nearing a trade agreement that would impose reciprocal 15% tariffs on select goods, mirroring a recent US-Japan deal.
The Financial Times reported Wednesday that the bloc could accept the levies to avoid a planned increase to 30% starting Aug. 1 under the Trump administration. Both sides could lift tariffs on certain goods, such as aircraft, spirits, and medical devices, the paper added.
The US president said Wednesday that the US would allow the EU to pay lower tariffs if the bloc agrees to open its market to American companies. Speaking at the AI Summit in Washington, DC, Trump said they opened previously closed markets and offered such an agreement to the EU as part of ongoing serious negotiations.
Recalling the completion of the trade agreement with Japan, Trump said: “And we’ve made numerous other deals like that, but opening up of a country is very important to us.” Trump also explained that they had reached agreements with the UK, the Philippines, and Indonesia, and were in the process of finalizing a trade agreement with China.
The US’ push for broader global trade agreements has bolstered expectations of a pickup in worldwide economic activity, fueling oil demand and supporting prices. Meanwhile, signs of strong demand in the US, the world’s largest oil consumer, also helped push prices higher.
US commercial crude oil inventories decreased by 0.8% during the week ending July 18, according to data released by the Energy Information Administration (EIA) late Wednesday. Inventories fell by around 3.2 million barrels to 419 million barrels, surpassing market expectations of a 1.4 million-barrel draw.
Strategic petroleum reserves, which are excluded from commercial crude stocks, decreased by 200,000 barrels to 402.5 million barrels, the data revealed.
Over the same period, gasoline inventories decreased by around 1.7 million barrels to 231.1 million. EIA data showed that US crude oil production decreased by 102,000 barrels per day (bpd) to about 13.27 million bpd during the week ending July 18.
US crude oil imports fell by 403,000 bpd to approximately 5.97 million bpd, while exports rose by 337,000 bpd to around 3.85 million bpd over the same period.
In the Short-Term Energy Outlook (STEO) released on July 8, the EIA projected that crude oil output in the country would average 13.37 million bpd in 2025. #Oil Prices Increase as US Inventories Decline by 0.8% Top 10 Largest Countries Debt to Surpass $64trn, US Drives Surge—Fitch
