Oil prices rose on Thursday morning, supported by renewed optimism surrounding US trade negotiations and a sharper-than-expected decline in American crude inventories, both of which eased investor concerns about global economic pressure.
Brent (BZ=F) crude futures gained 0.6% to trade at $68.90 per barrel, at the time of writing, while West Texas Intermediate (CL=F) futures climbed by the same margin to $65.67 a barrel.
The uptick followed signs of progress in tariff negotiations between Washington and its trading partners, which analysts said calmed fears over potential economic fallout.
“Buying was driven by optimism that progress in tariff negotiations with the US would help avoid a worst-case scenario,” Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities, told Reuters.
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“Still, uncertainty over US-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains,” he added, predicting WTI will likely remain range-bound between $60 and $70.
On the supply side, data from the US Energy Information Administration (EIA) revealed that crude inventories fell by 3.2 million barrels last week to 419 million barrels, a larger drop than analysts had anticipated.
Gasoline stockpiles also posted a significant decline, falling by 1.7 million barrels to 231.1 million, nearly double the expected 908,000-barrel draw. Meanwhile, distillate inventories, which include diesel and heating oil, rose by 2.9 million barrels to 109.9 million. Despite the increase, they remain near their lowest seasonal levels since 1996.
Gold prices slipped in early European trading on Thursday as improving global trade sentiment curbed demand for traditional safe-haven assets, overshadowing support from a weaker US dollar.
Gold futures were down 0.5% to $3,380.50 per ounce, at the time of writing, while spot gold dropped 1.4% to $3,377.15 per ounce.
The move came as trade tensions appeared to ease, with US president Donald Trump reaching a bilateral agreement with Japan to reduce tariffs on automotive imports. Meanwhile, European Commission officials signalled that the US and EU were edging closer to a deal that would impose a 15% tariff on certain European imports while waiving duties on others.
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The developments lifted broader market risk sentiment, dimming demand for gold as a hedge.
“Yesterday, gold prices were seen building up for the next bullish run until the news came out on trade front, triggering some profit-taking,” said Brian Lan, managing director at GoldSilver Central.
