Oil Rises on Trade Deal Progress, Inventory Draws


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures rose Friday morning after Chinese and U.S. 
American government officials confirmed progress in trade negotiations. A trade 
deal was signed this week, formalizing the agreement reached in London last 
month, according to Commerce Secretary Lutnick. The Chinese Commerce Ministry 
on Friday confirmed his comments.

   NYMEX-traded WTI for August rose $0.46 bbl to trade near $65.70 bbl, and ICE 
Brent for August delivery gained $0.44 bbl to $68.17 bbl.

   July RBOB gasoline futures slid $0.0085 to $2.0905 gallon, while the 
front-month ULSD futures contract advanced $0.0024 to trade near $2.3625 gallon.

   The U.S. dollar index strengthened by 0.108 points to 96.870.

   The deal would loosen ethane export restrictions from the United States to 
China in return for rare earth flows. While most details remain unknown, the 
agreement will likely keep tariffs at or near current levels, codifying the 
90-day tariff freeze.

   Oil prices were also supported by a weekly U.S. government inventory report 
showing oil and product stocks declining, with commercial crude oil inventories 
falling for a fifth straight week to an 11-year seasonal low. Diesel 
inventories tightening to 20% below the five-year average further lent support.

   Oil futures have fallen back to pre-war levels after a turbulent week. As 
the geopolitical risk-premium has almost entirely evaporated, market 
participants will likely return their focus to market fundamentals, with the 
direction of U.S. trade policy, global demand growth and the speed of OPEC 
output hikes remaining the largest sources of uncertainty.




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