Oil Holds Steady Amid U.S.–EU Trade Optimism

Oil prices remained flat on Thursday, with West Texas Intermediate (WTI) crude hovering just above $65 per barrel. The broader equities rally supported oil, fueled by optimism that the U.S. and European Union are nearing a trade agreement. This renewed risk appetite helped oil shrug off early-session weakness.

WTI Futures Stabilize After Early Losses

Earlier in the day, oil futures dipped after the U.S. Energy Information Administration (EIA) reported a rise in inventories at Cushing, Oklahoma—the key delivery hub for WTI contracts. While total U.S. crude inventories fell, the Cushing build pressured oil briefly before markets rebounded.

Cushing Inventories Climb to Multi-Month High

Stockpiles at Cushing reached their highest levels since June. Analysts, including Matt Smith from Kpler, noted this could signal more builds ahead. Cushing’s status as a benchmark storage site means any rise in inventories there can weigh on oil prices in the short term.

Distillate Inventories Build for Second Week

Adding to the bearish pressure, distillate inventories rose for the second consecutive week. This points to softening demand in industrial and freight sectors, key users of refined oil products. However, total crude stocks remain at their lowest seasonal level since 1996, providing underlying support.

Market Eyes U.S.–EU Tariff Negotiations

Investor sentiment improved on reports that the U.S. and EU are close to a trade deal that would impose 15% tariffs—similar to recent U.S. agreements with Japan. These developments temporarily boosted oil, as easing trade tensions typically support global demand expectations.

Tensions Remain with Tariff Deadlines Looming

Still, uncertainty lingers. The EU has warned of imposing 30% tariffs on billions in U.S. goods if no deal is reached. These looming threats keep the oil market cautious, with futures stuck in a narrow trading band. Mixed headlines have created a “drifting” oil market, according to analysts.

China Trade Talks Could Influence Oil Market

U.S. Treasury Secretary Scott Bessent will meet Chinese officials in Stockholm next week. Discussions may include Beijing’s ongoing purchases of oil from sanctioned nations like Russia and Iran. Any developments could shift global oil flows and affect market dynamics.

Oil Still Down 10% YTD Despite Global Events

Despite June’s price swings caused by Israel-Iran tensions, oil is still down roughly 10% year-to-date. Concerns persist that President Trump’s trade policies may suppress global consumption, even as OPEC+ continues ramping up supply to reclaim market share.