Oil Prices Edge Higher Amid Trade Optimism and Stronger Economic Data

Oil prices ticked up on Thursday, breaking a three-day losing streak, as investors reacted to unexpectedly positive economic data from major oil-consuming nations and signs of easing global trade tensions.

Brent crude futures rose 8 cents, or 0.1%, to $68.60 a barrel by 8:30 a.m. Saudi time, while U.S. West Texas Intermediate (WTI) crude gained 16 cents, or 0.2%, to reach $66.54. Both benchmarks had slipped more than 0.2% in the previous session, but found renewed support on fresh developments in the global economy.

Analysts pointed to stronger-than-expected Chinese economic indicators and a sharp drawdown in U.S. crude inventories as key drivers behind the rebound.

“China’s better-than-expected economic data and the U.S.’s larger-than-expected oil inventory draw have both been bullish factors for oil prices,” said Tina Teng, an independent market analyst. She added that improved trade sentiment also lifted investor confidence.

U.S. government data released Wednesday showed domestic crude inventories declined by 3.9 million barrels last week to 422.2 million barrels—well above analysts’ forecasts of a 552,000-barrel draw—suggesting tighter supply and stronger refinery activity.

While this pointed to robust demand for crude, larger-than-anticipated builds in gasoline and diesel inventories somewhat tempered gains. Analysts at ANZ noted that the rise in fuel stockpiles raised questions about whether demand from the busy summer travel season is as strong as expected.

The upward momentum in oil was also supported by developments on the trade front. U.S. President Donald Trump said letters outlining new U.S. tariff rates for smaller nations would be sent soon, with proposals of a uniform 10% or 15% tariff under consideration. However, he also signaled progress in trade relations, including new deals with Indonesia and Vietnam and ongoing talks with India and Europe.

On China, Trump struck a more conciliatory tone, suggesting a deal on illicit drugs was within reach and lifting a ban on the sale of artificial intelligence chips to Chinese firms—moves that helped ease market concerns over a prolonged U.S.-China trade standoff.

In China, economic growth slowed in the second quarter but remained stronger than anticipated, partly due to manufacturers accelerating output ahead of potential U.S. tariffs. Official data also showed China’s crude oil processing in June rose 8.5% year-on-year, reinforcing views of resilient demand in the world’s largest oil importer.

John Paisie, president of energy consultancy Stratas Advisers, said: “Support has come from the positive news pertaining to some easing of trade tensions between China and the U.S., with President Trump lifting the AI chip ban along with the announcement of a trade deal with Indonesia.”

Despite ongoing concerns over global demand, Thursday’s uptick in prices reflects cautious optimism that trade diplomacy and stronger economic signals could offer some support to oil markets in the near term.