Oil Prices Edge Higher Amid Trade Optimism and Supply Uncertainties

Highlights:

• Oil prices rose 0.4% amid optimism over a U.S.-EU trade deal and easing trade tensions with China.
• Gains were limited by a stronger U.S. dollar and declining Indian oil imports.
• OPEC is likely to continue its gradual supply restoration while geopolitical risks remain elevated.

Trade Deal Lifts Sentiment

Oil prices inched up on Monday as markets digested a new trade agreement between the United States and the European Union, boosting hopes for economic cooperation and energy demand. As of the time of writing, Brent crude futures were trading at US$68.74 per barrel, up 0.4%, while U.S. West Texas Intermediate (WTI) rose 0.4% to US$65.43 per barrel. The recent U.S.-EU pact introduced a 15% import tariff on most European goods and included a commitment by the EU to purchase US$750 billion worth of U.S. energy over the coming years. Analysts say the deal, along with a possible extension of the U.S.-China trade truce, has helped improve risk sentiment across global markets.

Dollar Strength and Indian Imports Curb Gains

Despite early gains, oil prices pared back after Brent briefly surpassed US$69. Market focus shifted to a strengthening U.S. dollar, which makes oil more expensive for holders of other currencies, and a dip in oil imports by India, a key consumer. This change in tone reflects ongoing volatility in energy markets.

OPEC and Supply Watch

On the supply side, an OPEC committee is expected to maintain its current plan to increase oil output, according to insiders. ING predicts OPEC will fully restore its 2.2 million barrels per day of voluntary supply cuts by the end of September. Additionally, Venezuela's PDVSA is preparing to resume operations once it receives renewed permissions from the U.S. government. Tensions in the Middle East also remain a concern. Yemen's Houthis warned they would target vessels linked to Israeli ports, escalating risks for maritime trade.

Disclaimer for Kapitales Research

The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com