Oil prices edged up in Asian markets on Thursday, buoyed by data revealing a significant drop in U.S. crude inventories, while investors remained cautiously attentive to the progress of trade negotiations ahead of President Donald Trump’s looming deadline.
By 22:18 ET (02:18 GMT), September Brent crude futures had risen 0.3% to $68.69 per barrel, with West Texas Intermediate (WTI) contracts also up 0.3% at $65.45 per barrel.
Both benchmarks have experienced declines over the past four sessions, as concerns grow over the potential impact of tariffs set to take effect on August 1, which could dampen energy demand.
U.S. Crude Stocks Show Sharp Decline, EIA Reports
According to the Energy Information Administration (EIA) on Wednesday, U.S. crude inventories plunged last week as refinery output increased and exports stayed strong, providing upward momentum for oil prices.
Crude supplies shrank by 3.17 million barrels in the week ending July 19, significantly surpassing the anticipated 1.6 million-barrel reduction forecasted by analysts.
With commercial inventories now roughly 9% below the five-year seasonal average, hovering near 419 million barrels, the data indicates tightening supply conditions in the market.
Gasoline inventories also dropped by 1.7 million barrels, more than the expected decline of 900,000 barrels, while distillate stocks climbed by 2.9 million barrels as seasonal restocking continued.
Following the report, oil prices gained ground, supported by signs of constrained supply and sustained demand in the U.S.
Trade Talks Take Center Stage Following U.S.-Japan Agreement
President Trump announced a new trade agreement with Japan on Wednesday that set tariffs on Japanese imports at 15%, down from a previously proposed 25%.
Under the deal, Japan committed to invest $550 billion in the U.S. economy and opened its markets to a range of American exports, including automobiles, farm products, and energy resources.
This agreement marks the most substantial in a series of trade deals the White House has negotiated ahead of the August 1 tariff deadline, fueling optimism that other countries may reach similarly favorable terms.
Nevertheless, investors remain cautious, closely watching developments with the European Union, especially after the bloc signaled it may retaliate against U.S. tariffs.
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