Oil prices held steady on Wednesday as markets weighed a modest U.S.-Japan trade agreement against ongoing uncertainties in U.S.-EU and U.S.-China negotiations. Brent crude dipped 8 cents, or 0.12%, to settle at $68.51 a barrel, while U.S. West Texas Intermediate (WTI) fell 6 cents, or 0.09%, to $65.25.
U.S. President Donald Trump announced a trade deal with Japan that cuts auto tariffs and includes a $550 billion investment package. Meanwhile, EU officials said a deal with the U.S. was close, which would avoid a harsher 30% tariff by agreeing to a broader 15% levy. Still, the European Commission prepared counter-tariffs on $109 billion of U.S. goods, with a vote expected Thursday.
Despite the easing of immediate tariff concerns, oil sentiment remained cautious due to delays in broader trade negotiations, especially with the EU and China. Tuesday’s losses of around 1% reflected these lingering worries.
On the supply side, U.S. crude inventories fell by 3.2 million barrels last week to 419 million, according to the EIA, exceeding expectations of a 1.6 million-barrel draw. Exports rose by 337,000 barrels per day, and net imports dropped by 740,000 bpd, adding bullish momentum.
Also supporting crude, the U.S. energy secretary signaled potential sanctions on Russian oil. Meanwhile, the EU enacted its 18th sanctions package, including a reduced price cap on Russian crude.