Crude Oil Prices Recover After Four-Day Decline: U.S.-EU Trade Progress and Russian Export Restrictions Drive Optimism

Crude oil prices gained ground after a four-day downturn, fueled by advancements in U.S.-EU trade negotiations and supply concerns triggered by Russia’s restrictions on gasoline exports. The rebound underscores renewed investor sentiment as geopolitical and economic factors spark bullish market momentum.

On July 24, West Texas Intermediate (WTI) crude for September delivery climbed $0.78 (1.20%) to close at $66.03 per barrel on the New York Mercantile Exchange. Similarly, Brent crude, an international benchmark for September delivery, rose $0.67 (0.98%) to settle at $68.62 per barrel.

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Strengthened Market Sentiment as U.S.-EU Trade Negotiations Advance

Progress in U.S.-EU trade talks has boosted confidence across energy markets. Reports suggest that the negotiations aim to establish a 15% baseline tariff on the majority of imported goods—approximately halving the originally proposed 30% tariff slated to take effect on August 1. This arrangement mirrors an earlier trade pact between former President Donald Trump and Japan, which helped avoid more punitive trade measures.

Hiroyuki Kikukawa, chief strategist at Nissan Securities, stated, “Optimism over avoiding a worst-case scenario in U.S.-EU tariff discussions spurred buying sentiment across the crude oil market.” The alleviation of trade tension promises to stabilize market dynamics, offering additional support for oil prices.

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Russia’s Gasoline Export Restrictions Aggravate Supply Concerns

Adding to positive pricing movements, Russia's decision to curb gasoline exports has further fueled supply fears. Slated to last through at least August and September, these measures are aimed at meeting rising domestic energy demand. Similar export restrictions have been implemented by Russia in previous years to address inflationary pressures within its own economy.

A source close to the matter confirmed, “The finalized restrictions will address domestic needs but will limit exports, tightening international supply.”

Phil Flynn, senior analyst at Price Futures Group, emphasized, “The market is seizing any bullish narrative, and Russia’s gasoline export restrictions fit this criteria. These supply side concerns are motivating traders to push oil prices higher.”

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U.S. Crude Inventory Data Triggers Additional Support

Further adding to market optimism, data from the Energy Information Administration (EIA) revealed stronger-than-expected declines in U.S. crude stockpiles. Last week, crude inventories fell by 3.17 million barrels, landing at 419 million barrels—significantly surpassing analyst expectations of a 1.6-million-barrel drop.

Janiv Shah, an analyst at Rystad Energy, remarked, “The sharper-than-anticipated crude drawdown reflects robust demand. Coupled with constructive trade progress between the U.S. and EU, the outlook for crude pricing remains positive in the near term.”

The inventory report has helped reinforce bullish sentiment, providing traders with confidence in demand-side metrics while supply constraints weigh heavily on the market narrative.

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Geopolitical Uncertainty Keeps Gains in Check

Despite encouraging developments, broader geopolitical risks continue to temper oil's rally. Lingering uncertainty surrounding U.S.-China trade relations and ongoing peace negotiations between Russia and Ukraine remains a key factor preventing prices from surging further.

Hiroyuki Kikukawa warned, “Geopolitical and trade risks are still unresolved, which is capping the crude market’s ability to break out decisively. These factors remain an overhang on oil prices.” He noted that WTI prices are likely to stay range-bound, oscillating between $60 and $70 per barrel in the short-term as traders weigh shifting geopolitical winds.

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Outlook: Bullish Drivers Versus Persistent Risks

While the crude oil market’s recovery signals improved sentiment, traders are carefully monitoring uncertainties that could upend global supply-demand equilibrium. The convergence of U.S.-EU trade progress, Russian export restrictions, and positive inventory data sets the stage for bullish momentum. However, unresolved geopolitical issues continue to serve as a counterweight to this optimism.

As energy markets navigate this complex landscape, the interplay of economic policies and geopolitical developments will define crude oil pricing trends in the coming months. For now, the market remains delicately balanced between upside potential and looming downside risks.

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