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Oil prices climb on trade optimism despite signs of rising Venezuelan supply

Oil prices climb on trade optimism despite signs of rising Venezuelan supply

Web Desk
Jul 25, 2025

SINGAPORE: Oil prices moved higher on Friday, supported by renewed optimism over global trade talks, which lifted market sentiment despite concerns about a potential increase in Venezuelan oil supply.

Brent crude touched a one-week high, rising 29 cents, or 0.42 per cent, to $69.47 a barrel as of 0310 GMT. Similarly, US West Texas Intermediate (WTI) crude gained 29 cents, or 0.44 per cent, to reach $66.32 a barrel.

The gains in oil followed positive developments in trade negotiations. The United States announced a new trade agreement with Japan earlier this week, while European Union diplomats signalled progress towards a deal that could involve a 15 per cent baseline tariff on EU imports, with possible exemptions. These developments helped boost sentiment across both oil and stock markets.

“Trade talk optimism appears to be offsetting expectations for stronger Venezuelan supply,” analysts at ING wrote in a note to clients.

On the supply side, the US is reportedly preparing to ease sanctions on Venezuela by allowing Chevron and other partners of the state-run PDVSA to resume limited operations. If approved, Venezuelan oil exports could rise by over 200,000 barrels per day. This would help ease supply tightness in the heavy crude market, particularly benefiting US refiners, ING noted.

Despite the potential increase in Venezuelan output, both Brent and WTI were supported by news of reduced Russian gasoline exports and a larger-than-expected draw in US crude inventories. According to the US Energy Information Administration, crude stocks dropped by 3.2 million barrels last week to 419 million barrels, far exceeding the 1.6 million barrel decline predicted by analysts.

So far this week, Brent is up 0.4 per cent, while WTI has slipped 1.4 per cent. Both benchmarks gained around 1 per cent on Thursday.

“I am encouraged by the way crude oil held and bounced away from the $65–64 support band this week,” said IG analyst Tony Sycamore. “It keeps hopes intact of a rebound towards $70,” he added, noting that key market data is expected next week.