Oil prices ticked up during Asian trade on Friday, with investors focusing on signs of progress in global trade negotiations, which boosted sentiment around oil demand and the broader economic outlook, outweighing concerns about potential additional supply from Venezuela.
By 3 pm AEST (5 am GMT), Brent crude futures rose 16 cents or 0.2% to $69.34 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 14 cents or 0.2% to $66.17 per barrel.
The gains came as hopes for fresh trade deals ahead of the 1 August U.S. tariff deadline lifted global equity markets and commodities.
The U.S. secured a trade agreement with Japan on Wednesday, and two European diplomats said the European Union was moving closer to a deal with Washington involving a baseline 15% U.S. tariff on EU imports with possible exemptions.
Earlier pressure on oil prices came from the news that the U.S. government would allow Chevron to resume pumping oil in Venezuela, marking a potential rise in global crude supply.
ANZ analysts noted: "The move erased an earlier slide spurred by the U.S. administration’s decision to allow Chevron to resume pumping oil in Venezuela. U.S. imports of Venezuelan crude have ground to a halt, down from 300kb/d in January after President Trump banned imports.
“While Venezuelan exports, which would previously have found a home in the U.S., have been picked up by China, the spectre of Venezuelan supply flooding a market already facing oversupply from OPEC’s increased production weighed on sentiment.”
Meanwhile, data from the U.S. Energy Information Administration released Wednesday showed a 3.2 million-barrel drop in domestic crude inventories, well above the 1.6 million-barrel draw expected.
Looking ahead, key economic data from major oil-consuming nations is due next week, including Chinese factory activity figures and U.S. inflation, employment, and inventory reports, which could offer further guidance for oil markets.
