Oil prices rose on Thursday (July 24), boosted by expectations of Russian gasoline supply cuts and optimism over US trade negotiations that will ease pressure on the global economy, further boosted by a sharper-than-expected decline in US crude inventories.

Brent crude futures rose 80 cents, or 1.17%, to $69.31 a barrel at 10:52 a.m. CDT (15:52 GMT). US West Texas Intermediate crude futures rose 97 cents, or 1.49%, to $66.22 a barrel.

"Russia's willingness to cut gasoline exports is giving the market a boost," said Phil Flynn, senior analyst at Price Futures Group. "The market is looking for a reason to rally." Three industry sources told Reuters that Russia is considering a stricter export ban as early as Monday that would include fuel producers.

The restrictions would exclude supplies to the Moscow-led Eurasian Economic Union, a grouping of five former Soviet Union states, and to countries like Mongolia that have intergovernmental agreements with Russia on fuel supplies, the sources said. Earlier in the session, oil futures rose on the previous day's report of a drawdown in US crude inventories and hopes for a trade deal between the US and the European Union that would lower tariffs.

"The drawdown in US crude inventories and the trade efforts are adding support to prices," said Janiv Shah, an analyst at Rystad. On Wednesday, two European diplomats said the EU and the US were moving toward a trade deal that could include a 15% US base tariff on EU imports and possible exemptions. This could pave the way for another major trade agreement after the Japan deal.

On Wednesday, US Energy Information Administration data showed crude inventories fell by 3.2 million barrels last week to 419 million barrels, far exceeding analysts' expectations in a Reuters poll for a draw of 1.6 million barrels. Oil prices were also supported by the suspension of Azerbaijani crude exports from the Turkish port of Ceyhan and the temporary halt in loadings at key Russian ports on the Black Sea, which have since been resolved.

BP said organic chlorides were detected in some oil tanks at the Ceyhan terminal, adding that oil loadings were continuing from some tanks with chloride levels assessed to be within normal specifications, while export activity through the BTC pipeline was also continuing.

Traders will be closely monitoring further news on loadings from Ceyhan and Novorossiysk, which together account for about 2.5% of global oil supply at 2.5 million barrels per day, according to Reuters calculations based on loading data from the region. (alg)

Source: Reuters