Oil prices rose in Asian trading on Thursday after U.S. President Donald Trump announced plans to reveal a trade agreement with a major economy later in the day, boosting optimism for a potential easing of his tariff policies.
However, crude remained weighed down by concerns over weakening demand and rising production from OPEC+. Prices had dropped sharply on Wednesday, staying near four-year lows following mixed U.S. inventory data, which indicated a slowdown in fuel consumption.
By 21:57 ET (01:57 GMT), Brent crude futures for July were up 0.5% at $61.41 per barrel, while West Texas Intermediate (WTI) futures increased 0.6% to $58.02 per barrel.
Oil lifted by U.S. trade deal hopes
Thursday’s price rebound was largely driven by Trump’s statement that he would announce a “major” trade deal with a key nation, which The New York Times reported was likely Britain.
If confirmed, this would mark the first trade deal since Trump introduced sweeping “reciprocal” tariffs against several major U.S. trade partners. Shortly after unveiling the tariffs, he had granted a 90-day exemption for all nations except China.
Uncertainty around Trump’s tariff strategy has been a major drag on oil prices in recent weeks, as markets worried about potential economic fallout. Oil was also hit by disappointing economic data from both the U.S. and China, which have been locked in a trade conflict since April.
While the Trump administration signaled plans for trade discussions with China this week, Trump said he had no intention of lowering the 145% tariffs imposed on Chinese goods. China, for its part, indicated that the talks were initiated mostly at the U.S.’ request.
Oil still pressured by demand fears and supply growth
Despite Thursday’s gains, oil prices have suffered heavy losses so far in 2025, with the decline accelerating recently due to mounting worries over weak demand and rising supply.
Demand concerns have been stoked by growing economic uncertainty, which was reinforced on Wednesday when the Federal Reserve left interest rates unchanged and warned of increased economic risks tied to trade tensions and possible inflation.
Expectations of greater output also weighed on crude after OPEC and its allies announced plans to significantly ramp up production in June. However, this pressure was partly offset by several large U.S. producers signaling a slowdown in domestic output, as the recent price slide has led to reduced capital investment.
