Oil Prices Rise as Trade Optimism Counters Venezuelan Supply Concerns
Oil prices edged higher on Friday, buoyed by optimism around global trade negotiations, which bolstered expectations for economic growth and stronger oil demand—overshadowing concerns about increased crude supply from Venezuela.
By 0519 GMT, Brent crude futures had climbed 20 cents (0.29%) to $69.38 per barrel, marking a one-week high. U.S. West Texas Intermediate (WTI) crude futures also gained 20 cents (0.30%) to reach $66.23.
The oil market, alongside global equities, found support amid growing expectations that the United States could secure new trade agreements before the August 1 deadline for new tariffs targeting imports from multiple countries.
Following a U.S.-Japan trade agreement announced on Wednesday, two EU diplomats suggested that the European Union is progressing toward a deal with the U.S. that may include a baseline 15% tariff on EU goods, with potential exemptions.
“Optimism around trade negotiations is helping offset the bearish sentiment from possible increases in Venezuelan oil supply,” analysts at ING noted in a client briefing.
According to sources on Thursday, the U.S. is considering easing restrictions on Venezuela’s state-owned oil company PDVSA, beginning with allowing Chevron (NYSE: CVX) to resume limited operations in the country. This could boost Venezuelan crude exports by over 200,000 barrels per day—a development likely welcomed by U.S. refiners facing tight supplies of heavier crude oil, ING analysts added.
On a weekly basis, Brent crude is up 0.4%, while WTI is down 1.4%. Both benchmarks rose around 1% on Thursday, supported by reports of reduced Russian gasoline exports and temporary disruptions in oil shipments from Kazakhstan’s Black Sea terminal and Azerbaijan’s BTC crude at the Turkish port of Ceyhan.
Further supporting prices was a sharper-than-expected drawdown in U.S. crude stockpiles. The Energy Information Administration reported on Wednesday that inventories dropped by 3.2 million barrels last week to 419 million barrels—well above the 1.6 million barrel draw forecasted in a Reuters poll.
IG analyst Tony Sycamore remarked, “I’m encouraged by crude’s ability to hold and bounce from support levels this week, which keeps the door open for a potential rally back to $70.”
Looking ahead, traders are awaiting key economic data next week from major economies—including Chinese manufacturing activity, and U.S. figures on inflation, employment, and inventory levels—which could further influence oil market sentiment.
