Oil prices rose on Friday as trade talk optimism supported the outlook for both the global economy and oil demand, outweighing news of the potential for more oil supply from Venezuela.

Brent crude futures touched a one-week high and were up 20 cents, or 0.29%, at $69.38 a barrel by 0519 GMT. U.S. West Texas Intermediate crude futures climbed 20 cents, or 0.30%, to $66.23.

Oil, along with stock markets, gained support from the prospect of more trade deals between the United States and trading partners ahead of an August 1 deadline for new tariffs on goods from an array of countries.

After the United States and Japan unveiled a trade deal on Wednesday, two European diplomats said the European Union was moving toward a deal involving a baseline U.S. tariff of 15% on EU imports, plus possible exemptions.

"Trade talk optimism appears to be offsetting expectations for stronger Venezuelan supply," ING analysts wrote in a client note on Friday.

The United States is preparing to allow partners of Venezuela's state-run PDVSA, starting with U.S. oil major Chevron (NYSE:CVX), to operate with limitations in the sanctioned nation, sources said on Thursday.

Venezuelan oil exports could consequently increase by a little more than 200,000 barrels per day, which would be welcome news for U.S. refiners, as it would ease tightness in the heavier crude market, ING analysts wrote.

So far this week, Brent has gained 0.4% and WTI has fallen 1.4%.

Both contracts advanced about 1% on Thursday, driven by reports of cuts to Russian gasoline exports. This week there were brief disruptions in Kazakh Black Sea oil exports and Azeri BTC crude loading from the Turkish port of Ceyhan.

Also supporting the market were U.S. crude inventory draws.

U.S. Energy Information Administration data on Wednesday showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far more than the 1.6 million barrel draw estimated by analysts in a Reuters poll. [EIA/S]

"I am encouraged by the way crude oil held and bounced away from band this week, which keeps hopes intact of a rebound back towards $70," said IG analyst Tony Sycamore, adding that next week will bring data for traders to chew over.

Economic data next week from the world's biggest economies and oil consumers include factory activity in China and U.S. inflation, jobs and inventories.

Source: Investing.com