Oil prices rose modestly on Monday following a preliminary trade agreement between the United States and the European Union, coupled with growing optimism that Washington will extend its current tariff truce with China. These developments helped calm global economic anxieties and supported energy market confidence.
As of 0035 GMT, Brent crude futures increased by 22 cents (0.32%), reaching \$68.66 per barrel, while U.S. West Texas Intermediate (WTI) also climbed by 22 cents (0.34%), trading at \$65.38 per barrel.
According to Tony Sycamore, an analyst at IG Markets, both the U.S.-EU trade breakthrough and the potential continuation of the U.S.-China tariff pause are boosting global market sentiment, which is positively influencing oil prices.
On Sunday, the U.S. and EU reached a preliminary trade pact that includes a 15% import tariff on most European goods, half the originally proposed rate. The deal averted a deeper trade rift between two major economies that collectively represent nearly one-third of global trade, a dispute that could have reduced fuel demand and slowed economic growth.
In a related development, U.S. and Chinese trade officials are scheduled to meet in Stockholm on Monday to discuss extending the tariff freeze, ahead of an August 12 deadline. Market watchers see this meeting as critical to maintaining global trade stability.
Last Friday, oil prices dipped to their lowest levels in three weeks, pressured by concerns about global trade and anticipated increases in Venezuelan oil exports. PDVSA, Venezuela’s state oil company, is reportedly preparing to resume joint venture operations, pending the **reinstatement of U.S. swap authorizations under President Trump, similar to those allowed during the Biden administration.
Despite Monday’s slight rebound, OPEC+ policy uncertainty capped gains. The OPEC+ Joint Ministerial Monitoring Committee (JMMC) is set to meet at 1200 GMT to review the current output strategy. While four insiders say no major changes are expected, one source cautioned that it’s too early to confirm.
The alliance continues its push to reclaim market share, with summer demand helping absorb the additional supply. JPMorgan analysts reported a year-on-year increase in global oil demand by 600,000 barrels per day in July, while inventories rose by 1.6 million barrels per day.
Meanwhile, geopolitical tensions remain high as Yemen’s Houthi rebels issued a fresh threat on Sunday, warning they will **target vessels linked to firms trading with Israeli ports**, regardless of the ship’s nationality. The announcement marks the start of the **fourth phase of their military campaign** tied to the ongoing Gaza conflict.
