West Texas Intermediate (WTI) crude oil is trading near $64.90 during Monday’s Asian session, gaining traction as markets respond to the newly confirmed trade agreement between the United States and the European Union. The deal, which introduces a 15% tariff on traded goods, is set to take effect on August 1—just ahead of President Joe Biden’s deadline, easing concerns over aggressive trade measures that could disrupt global economic growth and oil demand.
The positive sentiment from this development is offering short-term support to oil prices, with investors also awaiting the latest US crude inventory data from the American Petroleum Institute (API), due Tuesday.
Further boosting WTI’s outlook, US and Chinese officials are scheduled to hold trade talks on Monday in Stockholm. According to the South China Morning Post, both sides are likely to extend their current tariff truce, a move that could reinforce demand expectations from the world’s two largest oil consumers.
However, rising concerns about a potential supply glut could cap further gains. Both the International Energy Agency (IEA) and the US Energy Information Administration (EIA) have forecast a significant oil surplus in 2026. The IEA estimates a surplus of 2 million barrels per day, the largest since the COVID-19 pandemic, raising concerns about oversupply in the months ahead.
