Oil Edges Higher on U.S. Inventory Drop, Trade Deal Progress in Focus
Oil prices ticked up in Asian trading on Thursday, buoyed by a larger-than-expected drop in U.S. crude stockpiles, while investors remained watchful for progress on global trade negotiations ahead of President Donald Trump’s looming tariff deadline.
As of 22:18 ET (02:18 GMT), Brent crude futures for September delivery rose 0.3% to $68.69 per barrel, while West Texas Intermediate (WTI) crude increased 0.3% to $65.45 per barrel.
Both benchmarks had declined for the past four sessions, pressured by concerns that Trump’s August 1 tariff deadline could dampen global energy demand.
U.S. Inventories Drop Sharply, Lifting Oil Prices
Oil received a boost after the U.S. Energy Information Administration (EIA) reported a significant drop in crude inventories. Stockpiles fell by 3.17 million barrels in the week ending July 19, far exceeding analyst expectations for a 1.6 million-barrel decrease.
With total commercial inventories now about 9% below the five-year seasonal average, sitting near 419 million barrels, the data points to tightening supply conditions.
Gasoline inventories also dropped by 1.7 million barrels, almost double the forecasted 900,000-barrel draw, while distillate stocks rose by 2.9 million barrels—a seasonal increase tied to restocking efforts.
Signs of strong domestic demand and falling supply helped lift oil prices in the wake of the EIA report.
Market Eyes Global Trade Developments After U.S.-Japan Agreement
Investor sentiment also drew some support from Trump’s announcement of a trade deal with Japan, which reduced planned tariffs on Japanese imports to 15% from 25%.
Under the agreement, Japan pledged $550 billion in U.S. investment and expanded access for U.S. goods, including autos, agricultural products, and energy.
This deal is seen as the most significant among several being pursued by the U.S. ahead of the August 1 deadline for broader tariff implementation, and has raised hopes that similar agreements could follow with other key trading partners.
Still, markets remained cautious, particularly as attention turned to ongoing talks with the European Union, which recently warned of possible retaliatory measures in response to U.S. tariff threats.
