Oil held steady as equities headed toward all-time highs on news of potential progress in trade talks between the US and the European Union, offsetting nascent signs of a softening physical market.
West Texas Intermediate crude settled little changed above $65 a barrel, recovering from its lows of the day as risk assets rallied on reports the EU and the US are closing in on a deal that would impose 15% tariffs on European imports, similar to the agreement struck with Japan.
Futures fell earlier in the session after the US Energy Information Administration reported that inventory levels at Cushing, Oklahoma, the delivery point for WTI futures, rose to the highest since June. Distillate reserves increased for a second straight week. Still, overall crude inventories fell, and diesel stockpiles remain at the lowest seasonal level since 1996, lending support to oil markets.
“Cushing is perhaps the most important takeaway, with more builds expected in the weeks ahead to carry it away from historic lows,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler.
The stockpile data provided a downside catalyst to prices that had been drifting aimlessly amid mixed trade developments. While President Donald Trump unveiled deals with Japan and the Philippines, the European Union plans to quickly hit the US with 30% tariffs on billions of dollars worth of goods if no agreement is reached.
US Treasury Secretary Scott Bessent said he’ll discuss a potential extension of the trade truce with China during talks in Stockholm next week. The discussions can now take on a broader array of topics, potentially including Beijing’s continued purchases of “sanctioned” oil from Russia and Iran, he said.
Crude has traded in a relatively narrow range this month after a volatile June, when prices were jolted by the conflict between Israel and Iran. US crude is still down about 10% this year on concerns Trump’s tariff war will stifle consumption as OPEC+ brings back production.
Oil Prices
West Texas Intermediate for September delivery fell 0.1% to settle at $65.25 a barrel.
Brent for September settlement fell 0.1% to $68.51 a barrel.
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