Oil Prices Rise on Trade Optimism and Unexpected Drop in US Inventories

Global oil markets witnessed a significant increase in prices during trading on Thursday, July 24, supported by a mix of positive factors including progress in US trade talks and an unexpected decline in crude inventories in the United States.

Brent crude rose slightly by 0.3% to reach $68.77 per barrel, while West Texas Intermediate crude increased by 0.4% to $65.55 per barrel. This rise followed a relatively stable session on Wednesday, with traders focusing on trade developments between Washington and its partners.

Markets responded positively to trade negotiation progress, especially after the recent agreement between the United States and Japan, which included reducing tariffs on cars in exchange for a large investment package.

Hiroyuki Kikukawa, chief analyst at Nissan Securities, noted that "progress in trade negotiations enhances hopes of avoiding the worst-case scenario for the global economy," but warned that "uncertainty surrounding US-China negotiations and the situations between Russia and Ukraine limit oil gains."

In a related context, official data showed a significant decrease in US oil inventories by 3.2 million barrels last week, far exceeding analysts' expectations of only a 1.6 million barrel decline.

Geopolitical tensions continue to cast shadows over the market, as talks between Russia and Ukraine resumed in Istanbul with ongoing disagreements over ceasefire terms. New regulatory rules affected oil exports from Russian ports on the Black Sea, while the European Union continued to tighten sanctions on Moscow by reducing the ceiling price of Russian oil.

Market experts expect West Texas Intermediate crude to remain trading in the range of $60 to $70 per barrel in the near future, with investors focusing on supply and demand dynamics and influential geopolitical factors.