Oil Steady as US-Japan Deal Boosts Markets

Oil prices held steady on Wednesday after slipping for three straight sessions, supported by optimism following a U.S.-Japan trade deal that has improved global trade sentiment.

Brent crude was nearly flat at $68.57 a barrel, while U.S. West Texas Intermediate (WTI) edged down slightly to $65.29 per barrel. Both benchmarks lost about 1% in the previous session amid rising concerns over potential EU countermeasures against U.S. tariffs, dampening hopes for a broader trade agreement ahead of the August 1 deadline.

President Trump announced a trade deal with Japan, including a 15% tariff on U.S. imports from Japan and a commitment from Japan to invest $550 billion in the U.S. However, expectations remain cautious as negotiations with the EU and China face hurdles, with Thursday’s EU-China summit unlikely to bring immediate breakthroughs.

Meanwhile, U.S. crude and gasoline inventories fell last week, providing some support for prices despite an expected surplus later in the year. The rise in distillate stocks offers relief to a tight middle distillate market.

Adding to market dynamics, the U.S. Energy Secretary indicated potential sanctions on Russian oil to pressure an end to the Ukraine conflict. The EU recently imposed its 18th sanctions package against Russia, including a price cap on Russian crude, though lack of U.S. participation may limit its impact.

Overall, oil markets remain cautious amid a complex mix of trade developments, geopolitical tensions, and supply factors.