Oil Prices Rise as Trump Postpones EU Trade Talks Deadline to July

BEIJING: Oil prices rose on Monday after U.S. President Donald Trump pushed back a deadline for trade discussions with the European Union, alleviating worries regarding U.S. tariffs on the bloc that could negatively impact the global economy and fuel consumption. Brent crude futures increased by 26 cents, or 0.4 per cent, reaching $65.04 per barrel by 0433 GMT, while U.S. West Texas Intermediate crude gained 24 cents, or 0.39 per cent, to $61.77 a barrel. "A positive increase in crude oil and U.S. equity futures this morning followed U.S. President Trump's deadline extension," stated IG market analyst Tony Sycamore.

Trump announced his consent to prolong the trade negotiation deadline with the European Union until July 9, following Ursula von der Leyen, the president of the European Commission, indicating that the bloc required additional time to finalise an agreement. Sycamore stated that trade and tariff news, along with persistent fiscal issues, will be the key unpredictable factors for risk sentiment and crude oil this week. Brent and WTI continued to rise after closing 0.5 per cent up on Friday as minimal advances in U.S.-Iran nuclear discussions eased worries about additional Iranian oil entering global markets, and U.S. buyers secured positions before the three-day Memorial Day weekend.

ALSO READ: Silsako Reservoir Project: Assam’s Bold Bid to Tackle Guwahati’s Flood Woes, GMDA replies

Prices were also supported by information from energy services company Baker Hughes, which revealed that U.S. companies, facing pressure from declining oil prices, reduced the count of active oil rigs by 8 to 465 last week, marking the smallest number since November 2021. The increases were limited by anticipations that the Organisation of the Petroleum Exporting Countries and their partners, referred to as OPEC+, might opt to boost production by an additional 411,000 barrels per day (bpd) for July during next week's gathering. Suvro Sarkar, the chief energy analyst at DBS Bank, stated that oil was already facing pressure due to OPEC+’s accelerated output increase strategy and a "mini oil price war."

"Any price increases are expected to be restrained by the OPEC+ choice in the days ahead," he remarked. This month, Reuters stated that the group might reverse the remainder of its 2.2 million bpd voluntary production reduction by the end of October, having previously increased output goals by roughly 1 million bpd for April, May, and June. Warren Patterson, ING's head of commodities strategy, noted in a client message that OPEC+'s choice to boost production should ensure a good supply in the market during the latter half of this year.