Oil prices traded higher during Wednesday's Asian session, snapping three days of consecutive declines after the announcement of a United States trade agreement with Japan signalled progress on global tariff talks.
However, gains remained limited as optimism faded for any breakthrough at this week’s EU-China summit.
By 3 pm AEST (5 am GMT), Brent crude futures were up 22 cents or 0.3%, to US$68.81 per barrel. U.S. West Texas Intermediate (WTI) crude for September gained 22 cents or 0.3%, to $65.53 per barrel.
Both benchmarks had lost around 1.5% over the three previous sessions after the European Union warned of potential retaliatory measures against U.S. tariffs, casting doubt on any resolution before an 1 August deadline.
On Tuesday, President Donald Trump announced a trade deal with Japan that includes a 15% tariff on Japanese exports to the U.S., alongside a commitment from Japan to invest US$550 billion in the American economy.
While the news offered some support to oil markets, traders remained cautious amid persistent geopolitical risks and soft expectations for Thursday’s EU-China summit.
China's commerce ministry said its officials held a “candid and in-depth” dialogue with the European Union's trade chief, covering economic cooperation and trade challenges, ahead of the meeting.
Meanwhile, U.S. crude and gasoline inventories fell last week, according to data from the American Petroleum Institute cited by market sources on Tuesday.
Adding to bullish signals, U.S. Energy Secretary Jennifer Granholm said on Tuesday that the U.S. is considering sanctions on Russian oil as part of its strategy to end the war in Ukraine.
