West Texas Intermediate (WTI) Oil price gains ground after registering more than 1.50% losses, trading around $65.10 per barrel during the Asian hours on Monday. Crude Oil prices receive support due to trade optimism, driven by the trade deal between the United States (US) and the European Union (EU).
The US and EU reached a framework trade agreement on Sunday that sets 15% tariffs on most European goods, taking effect on August 1. This deal has ended a months-long standoff, according to Bloomberg. European Commission President Ursula von der Leyen noted that the bloc agreed not to impose retaliatory tariffs and pledged $600 billion in investment in the US on top of existing expenditures.
Additionally, the market sentiment improves ahead of the US-China trade talks. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet later in the day in Stockholm. The world’s two largest Oil consumers are expected to extend their tariff truce by another three months, according to a source cited by the South China Morning Post (SCMP) on Sunday. The US has reportedly frozen export controls on key technologies to China to maintain smoother trade relations, according to a source cited by the Financial Times. These developments have boosted optimism about a further easing of global trade tensions, potentially reinforcing expectations for increased crude demand.
However, the upside of the Oil prices could be limited due to the potential for further easing supply curbs by the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+. Four OPEC+ delegates stated last week that it is unlikely the eight-member countries will alter their plan to increase oil output by 548,000 barrels per day in August, per Reuters.
