Oil prices climbed on Monday following a trade agreement between the U.S. and the European Union, along with indications that the U.S. may extend its tariff pause with China developments that eased fears of higher levies dampening economic growth and curbing fuel demand.
Brent crude futures edged up by 22 cents, or 0.32%, to $68.66 per barrel as of 0035 GMT, while U.S. West Texas Intermediate (WTI) crude also gained 22 cents, or 0.34%, reaching $65.38 per barrel.
According to IG Markets analyst Tony Sycamore, both the U.S.-EU trade pact and the potential continuation of the U.S.-China tariff suspension are bolstering global financial markets and lifting oil prices.
On Sunday, the U.S. and the European Union reached a preliminary trade deal that includes a 15% import tariff on most EU products half the originally proposed rate.
The agreement helped prevent a more severe trade conflict between two major economies that together represent nearly one-third of global trade and could have negatively affected fuel consumption.
Additionally, senior U.S. and Chinese officials are scheduled to meet in Stockholm on Monday in hopes of extending a truce that has so far prevented significantly higher tariffs, ahead of the August 12 deadline.
On Friday, oil prices settled at their lowest point in three weeks due to concerns over global trade and expectations of increased oil exports from Venezuela.
Venezuela’s state-owned oil company, PDVSA, is preparing to restart operations in its joint ventures under conditions similar to those permitted during the Biden administration, pending the reinstatement of authorizations by President Trump for partners to operate and trade oil through swaps, company sources revealed.
Despite Monday’s modest price increase, gains were capped by speculation that OPEC+ might continue relaxing production restrictions.
The Joint Ministerial Monitoring Committee (JMMC) of OPEC and its allies is scheduled to convene at 1200 GMT on Monday.
Four OPEC+ sources indicated last week that the panel is unlikely to suggest changes to the existing plan for eight member countries to boost output by 548,000 barrels per day in August.
However, another insider noted it was still too early to make a definitive judgment.
The alliance is focused on regaining market share, particularly as summer demand helps absorb the additional supply.
JP Morgan analysts reported that global oil demand rose by 600,000 barrels per day in July compared to the same period last year, while inventories increased by 1.6 million barrels per day.
Meanwhile, Yemen’s Houthi rebels warned on Sunday that they would target any vessel affiliated with firms conducting business with Israeli ports, regardless of nationality, as part of what they described as the fourth phase of their military campaign against Israel in response to the Gaza conflict.
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