# Oil Prices Remain Flat As U.S.-EU Trade Talks Brighten Investor Sentiment

Oil prices closed near flat on Thursday, reversing much of their intraday losses, as optimism surrounding progress in U.S.-European Union trade negotiations improved market sentiment and tempered earlier declines.

On July 23, West Texas Intermediate (WTI) crude for September delivery marginally slipped by $0.06, or 0.09%, settling at $65.25 a barrel on the New York Mercantile Exchange. Brent crude, the international benchmark, also edged lower by $0.08, or 0.12%, finishing at $68.51 a barrel.

Earlier in the trading session, WTI dropped as low as $64.74 a barrel following reports that the European Union was considering retaliatory tariffs targeting $110 billion worth of U.S. exports if trade talks with Washington faltered. The proposed tariffs focused on key U.S. industries such as Boeing airplanes, automobiles, and bourbon whiskey, with rates set at 30%.

However, oil prices rebounded after news emerged suggesting potential progress in U.S.-EU negotiations. According to The Financial Times, unnamed sources revealed that both parties were close to agreeing on reciprocal 15% tariffs, half of the rates initially proposed by President Donald Trump. This development mirrored similar trade terms finalized between Washington and Tokyo the day before, which further bolstered investor confidence.

# Expert Analysis: Gains Limited Amid Lingering Trade Uncertainties

Despite the positive developments in U.S.-EU and U.S.-Japan trade agreements, market experts caution against overstated optimism.

“The stabilization in oil prices over the last three sessions hints at reduced volatility,” said Vandana Hari, founder of Vanda Insights. However, she emphasized, “The recent deal with Japan is unlikely to trigger significant upward momentum in crude prices due to unresolved uncertainties surrounding negotiations with the EU and China, which continue to overshadow investor outlook on trade and economic conditions.”

Andrew Lipow, president of Lipow Oil Associates, echoed this sentiment, noting, “While the agreement with Japan could serve as a model for future deals with other countries, including the EU, markets remain skeptical of the U.S.’s ability to secure broader agreements—particularly with China—amid existing geopolitical tensions.”

# U.S. Crude Inventory Data Offers Temporary Support

In addition to trade progress, U.S. crude oil inventories provided a boost to prices. The Energy Information Administration (EIA) reported a significant 3.17 million-barrel drop in U.S. crude stockpiles last week, reducing the total to 419 million barrels. The drawdown exceeded analysts’ forecasts, which had anticipated a smaller decline of just 1.6 million barrels.

Bob Yawger, director of energy futures at Mizuho, described the inventory numbers as “a highly bullish signal,” adding, “The faster-than-expected reduction in U.S. crude inventories stems from a notable gap between imports and exports, which is driving stockpile drawdowns.”

Nonetheless, market participants remain cautious. Ongoing developments in global trade relations, coupled with concerns over broader economic conditions, continue to influence oil price trends. As traders carefully track negotiations between the U.S., EU, and China, the interplay between geopolitical events and underlying supply-demand fundamentals will likely dictate future market dynamics.

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