Oil holds advance as US trade deal with Vietnam lifts sentiment

Oil steadied after its biggest gain in almost two weeks, as US President Donald Trump’s announcement of a trade accord with Vietnam boosted optimism further agreements will be made by next week’s cutoff.Brent traded near $69 a barrel after surging by 3% on Wednesday, with West Texas Intermediate above $67. The deal with Vietnam would be just the third announced following agreements with the UK and China, as trading partners race to cut agreements with the US ahead of a July 9 deadline.

Crude has been buffeted in recent weeks, surging and collapsing along with perceived geopolitical risk in the Middle East, although volatility has eased in recent days. Focus is returning to trade talks, and the associated tariffs that threaten oil demand, as well as to Sunday’s OPEC+ meeting, where the group is widely expected to agree on another bumper increase in supply quotas.

In the US, nationwide crude stockpiles rose by 3.8 million barrels, the first weekly increase since May. Inventories at the Cushing, Oklahoma, oil storage hub, fell for a fourth week and are at the lowest seasonal level since 2014.Widely watched market metrics point to signs of strength as an ongoing heat wave and the driving season in the US buoys demand. Brent’s prompt spread — the gap between the two nearest contracts — was at $1.20 a barrel in backwardation. While that’s down from higher levels during last month’s war between Israel and Iran, it’s up from 69 cents a month ago.

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