(Bloomberg) — Oil fell after its biggest gain in almost two weeks, with traders monitoring trade talks between the US and its partners and this weekend’s OPEC+ meeting.
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Brent traded near $69 a barrel after surging by 3% on Wednesday, with West Texas Intermediate above $67. President Donald Trump said he had struck a trade deal with Vietnam, which would be just the third announced following agreements with the UK and China, before a July 9 deadline to reach accords.
Crude has been buffeted in recent weeks, surging and collapsing along with perceived geopolitical risk in the Middle East, although volatility and volumes have fallen in recent days before Friday’s US holiday. Focus is returning to trade talks, and the associated tariffs that threaten oil demand, as well as to Sunday’s OPEC+ meeting, where the group is widely expected to agree on another bumper increase in supply quotas.
“While trade optimism provided a boost to oil prices, the sustainability of this move will likely be short-lived,” said Warren Patterson, head of commodities strategy for ING Groep NV. “OPEC+ is set to decide on August output levels this weekend, and so the market will probably be cautious about carrying too much risk into the US long weekend.”
In the US, nationwide crude stockpiles rose by 3.8 million barrels, the first weekly increase since May. Inventories at the Cushing, Oklahoma, oil storage hub fell for a fourth week and are at the lowest seasonal level since 2014.
Widely watched market metrics point to signs of strength as an ongoing heat wave and the driving season in the US buoys demand. Brent’s prompt spread — the gap between the two nearest contracts — was at $1.21 a barrel in backwardation. While that’s down from higher levels during last month’s war between Israel and Iran, it’s up from 69 cents a month ago.
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