Oil Prices Rise Supported by Global Trade Developments

Oil prices witnessed a slight increase during Monday's trading on July 28, supported by the trade agreement between the United States and the European Union, and expectations of extending the tariff truce between Washington and Beijing, easing concerns about economic growth slowdown and its impact on global fuel demand.

Brent crude futures rose by 0.5%, reaching $68.78 per barrel, while West Texas Intermediate crude rose by about 0.4%, reaching $65.43 per barrel.

Analysts attributed this increase to positive factors in the global markets, where Tony Sycamore, an analyst at "IG Markets," said, "The initial trade agreement between the United States and the European Union, along with the possibility of extending the tariff truce between Washington and Beijing, provided support to global financial markets and oil prices," according to Reuters.

This comes after the announcement of the U.S.-EU agreement that imposed a 15% tariff on most European goods, half the rate previously threatened by Washington, helping to avoid an escalation of a trade war between the two parties, which together represent about a third of global trade.

In a related context, high-level negotiators from the United States and China are expected to meet today in Stockholm in an attempt to extend the tariff truce before the final deadline set on August 12, which, if not extended, would lead to higher tariffs, threatening energy demand.

Despite this increase, gains remained limited due to expectations of an increase in oil supply, especially with the readiness of the Venezuelan national oil company to resume operations in joint projects, following the reactivation of U.S. licenses for partner companies under conditions similar to those of the former President Joe Biden era.

At the same time, the Ministerial Monitoring Committee of the OPEC+ alliance is expected to meet today at 12:00 GMT to discuss production policy, despite expectations of no amendments to the current plan allowing an increase in production by eight members by 548,000 barrels per day in August.

Data from J.P. Morgan indicates that global oil consumption increased by 600,000 barrels per day in July compared to last year, while inventories increased by 1.6 million barrels per day, reflecting a delicate balance between supply and demand.