Singapore: Oil prices rose on Monday after the U.S. reached a trade deal with the European Union (EU) and may extend a tariff pause with China, which reduced concerns that potentially higher levies would limit economic activity and impact fuel demand.
Brent crude futures inched up 22 cents, or 0.32 per cent, to 68.66 dollars a barrel by 0035 GMT while U.S. West Texas Intermediate crude was at 65.38 dollars a barrel, up 22 cents, or 0.34 per cent.
The U.S.-European Union trade deal and a possible extension of the U.S.-China tariff pause are supporting global financial markets and oil prices, IG Markets analyst Tony Sycamore said.
The United States and the European Union struck a framework trade agreement on Sunday that will impose a 15 per cent import tariff on most EU goods, half the threatened rate.
The deal averted a bigger trade war between two allies that account for almost one-third of global trade and could crimp fuel demand.
Additionally, senior U.S. and Chinese negotiators will meet in Stockholm on Monday, aiming to extend a truce that keeps tariffs at a higher level at bay ahead of the August 12 deadline.
Oil prices settled on Friday at their lowest in three weeks as global trade concerns and expectations of more oil supply from Venezuela weighed.
Venezuela’s state-run oil company, PDVSA, is preparing to resume operations at its joint ventures under terms similar to those of the Biden-era licenses, once U.S. President Donald Trump reinstates authorisations for its partners to operate and export oil under swaps, according to company sources.
Although prices rose slightly on Monday, the prospect of OPEC+ further easing supply curbs limited the gains.
A market monitoring panel of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies will meet at 1200 GMT on Monday.
It is unlikely to recommend altering existing plans by eight members to raise oil output by 548,000 barrels per day in August, four OPEC+ delegates said last week.
Another source said it was too early to tell.
The producer group is keen to recover market share while summer demand is helping to absorb the extra barrels.
JP Morgan analysts said global oil demand rose by 600,000 barrels per day (bpd) in July compared to the same period last year, while international oil stocks increased by 1.6 million bpd.
In the Middle East, Yemen’s Houthis said on Sunday they would target any ships belonging to companies that do business with Israeli ports, regardless of their nationalities, as part of what they called the fourth phase of their military operations against Israel over the Gaza conflict.