Oil Prices Tick Higher Amid Hopes for Trade Progress

Highlights:

• Brent crude edged higher to just under US$69, while WTI hovered around US$66 amid renewed trade optimism.
• President Trump’s tariff deals with Japan (15%) and the Philippines (19%) lifted Asian and US stock markets.
• US Treasury Secretary Scott Bessent to hold trade talks with China next week, possibly extending the August 12 deadline.

Tariff negotiations provide short-term support to oil markets

Oil prices posted modest gains as investor sentiment improved on news of ongoing trade talks between the United States and its key global partners. At the time of writing, Brent crude was trading just below US$69 per barrel, recovering from a three-day slide. West Texas Intermediate (WTI) was hovering near US$66 per barrel.

Trade deals with Japan and the Philippines offer relief

US President Donald Trump recently announced new tariff agreements—19% with the Philippines and 15% with Japan—triggering a rally in Asian equities and a positive shift in US stock futures. These developments have temporarily eased market fears surrounding escalating trade tensions and their impact on global economic growth.

Talks with China and sanctions concerns in focus

In a separate update, US Treasury Secretary Scott Bessent confirmed he will meet Chinese officials in Stockholm next week to continue trade discussions. He also hinted at a possible extension beyond the current August 12 deadline, providing markets with further optimism. Bessent noted that talks may expand to address broader issues, including China’s purchases of oil from sanctioned nations like Russia and Iran.

Oil remains under pressure despite short-term rally

Despite this brief uptick, oil prices remain subdued. Brent crude is still down approximately 8% year-to-date, largely due to persistent concerns that the ongoing US-led tariff war may dampen global oil demand. Additionally, rising output from OPEC+ nations continues to weigh on market sentiment.

As geopolitical uncertainty and trade negotiations evolve, investors remain cautious about the long-term outlook for crude, with volatility expected to persist in the months ahead.

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