Oil prices are poised for a weekly gain on Friday, driven by a drop in US crude inventories, renewed optimism surrounding US-China trade talks, and expectations of sustained global demand despite rising output from major oil producers.
The international benchmark Brent crude traded at $63.75 per barrel at 1.20 p.m. local time (1020 GMT), marking an increase of around 4% from last week's closing price of $61.31.
Similarly, the American benchmark West Texas Intermediate (WTI) was trading at $60.69 per barrel, up approximately 4.4% from last Friday's closing level of $58.10.
The increase came despite initial pressure from an announcement by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to boost production levels in June. The eight member countries plan to raise output by 411,000 barrels per day (bpd) compared to May as part of a phased plan to unwind voluntary cuts.
Markets responded with a short-lived price drop early in the week, reflecting concerns over a potential supply glut. However, investor sentiment shifted after bargain buying and favorable macroeconomic signals helped prices recover.
On Wednesday, oil prices gained further support amid reports that US and Chinese officials will resume trade talks in Switzerland, marking the first high-level meeting since President Donald Trump imposed sweeping tariffs on China. The news improved market expectations for global economic growth and future oil demand.
Additionally, a drawdown in US crude inventories helped ease supply concerns. According to data released Thursday by the US Energy Information Administration (EIA), US commercial crude oil inventories fell by 2 million barrels to 438.4 million barrels last week, indicating healthy demand in the world鈥檚 largest oil consumer.
The upward trend was reinforced by the Federal Reserve's decision to leave interest rates unchanged, which weakened the US dollar and made dollar-denominated oil more attractive for foreign buyers. Analysts also noted a growing market expectation of a possible rate cut in July, which could further support prices.
US and the United Kingdom announced a new trade and economic agreement on Thursday. The deal included tariff reductions on key exports such as steel, aluminum, and automobiles, and was welcomed by investors as a sign of improving trade relations that may stimulate economic activity and energy demand.
On the other hand, the Middle East and South Asia continued to create a cautious tone in oil markets. Israeli Prime Minister Benjamin Netanyahu threatened retaliation against Iran and 365bet体育在线世界杯 after a missile strike targeted Ben Gurion Airport, while rising tensions between India and Pakistan following cross-border clashes also contributed to market uncertainty.
EIA, in its latest Short-Term Energy Outlook, revised down its average Brent crude price forecast for 2025 to $65.85 per barrel, citing projected increases in global inventories. However, near-term prices remain supported by strong demand signals and progress on the trade front.
By Humeyra Ayaz
Anadolu Agency