Oil climbed in light pre-holiday trading after US President Donald Trump said he had reached a trade deal with Vietnam.
West Texas Intermediate rose 3.1% to settle above $67 a barrel after Trump said he had reached a pact with the Southeast Asian nation that eliminated the nation’s import tariff on US goods. The deal is the third announced following agreements with the major trade partners UK and China, with investors pricing in a tentative optimism that more will be reached ahead of a July 9 deadline.
Oil’s jump was probably amplified by low liquidity ahead of Friday’s July Fourth holiday in the US.
The price gains came despite government data Wednesday showing a buildup in US crude inventories of 3.85 million barrels. The increase is the largest in three months, and more than five times the 680,000 barrel increase projected by the industry-funded American Petroleum Institute on Tuesday.
Trading activity in crude futures has declined overall since the truce between Israel and Iran led prices to plunge early last week, with volatility returning to the lower levels seen before the war. The market is likely to turn its attention to a glut forecast for later this year, with an OPEC+ meeting this weekend expected to deliver another substantial increase in production quotas.
“Speculators who are already net-long are trying to protect their position,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA. “The problem is that they are running into a OPEC+ meeting with no place to hide over the long weekend.”
Investors will also hone in on a slew of inputs expected in the coming days, ranging from a jobs report Thursday to an OPEC+ output decision at the weekend.
Oil Prices
WTI for August delivery rose 3.1% to settle at $67.45 a barrel in New York.
Brent for September settlement advanced 3% to settle at $69.11 a barrel.
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