Slight rise in oil prices supported by the US-EU Trade Agreement
Crude oil prices showed a slight improvement during trading on Monday, trading around the level of 65 dollars per barrel, supported by the announcement of a new trade agreement between the United States and the European Union, which added limited optimism about the improvement in global demand for crude.
Details of the US-European Trade Agreement
US President Donald Trump and European Commission President Ursula von der Leyen on Sunday announced an agreement imposing 15% tariffs on most European goods, a significant reduction compared to Trump's previous threat of 30% tariffs.
The agreement is consistent with the general framework of the agreement that the United States concluded with Japan last week, boosting hopes for easing global trade tensions, which have been putting pressure on economic growth and oil demand.
Oil gains remain limited due to oversupply expectations
Despite the positive impact of the Trade Agreement, oil gains remained limited due to market expectations that OPEC will announce a significant increase in oil supplies during its next meeting.
It is estimated that producing countries may agree to gradually raise production to support prices without flooding the market.
US-China negotiations may affect oil trends
US officials are scheduled to meet with their Chinese counterparts in Stockholm to discuss the extension of the trade truce between the two countries, in an attempt to avoid a new escalation in the trade war that has negatively affected the global economy.
If the talks produce positive results, this could support investor confidence and strengthen the prospects for oil demand growth, especially with the approach of winter and an increase in global energy consumption.
Future forecasts of oil prices
Oil prices are likely to remain under the influence of the following factors:
- Developments in trade negotiations between the United States and China.
- OPEC decisions on production levels.
- The pace of global economic growth and recession fears.
While any progress in trade negotiations may support oil prices, an increase in supply by OPEC may limit significant gains, potentially keeping trades in the range of 65-70 dollars per barrel over the coming period.
