Oil prices climbed on Thursday, driven by a decline in US crude inventories, renewed optimism over US–China trade talks, and the Federal Reserve's decision to hold interest rates steady.
International benchmark Brent crude increased by around 0.5%, trading at $61.21 per barrel at 10.27 am local time (0728 GMT), up from $60.88 at the previous session's close.
US benchmark West Texas Intermediate rose by about 0.6%, reaching $58.05 per barrel, compared to its prior session close of $57.70.
Oil prices rose as a build in US crude inventories signaled resilient demand in the world’s top oil-consuming nation.
US crude inventories fell by roughly 2 million barrels to 438.4 million barrels last week, according to data from the US Energy Information Administration (EIA). While the draw was slightly below analysts’ forecast for a 2.5 million barrel decline, it still pointed to robust consumption.
In parallel, progress on trade negotiations between Washington and Beijing also buoyed market sentiment.
Reports indicate that US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are scheduled to meet with Chinese officials in Switzerland this week, marking the first formal discussions since sweeping tariffs were imposed by US President Donald Trump.
China confirmed the meeting was initiated by the US and reiterated its readiness to engage in constructive dialogue.
Adding to the momentum, Trump announced on Wednesday that the US is set to sign a trade agreement with 'a large and respected' country on Thursday. While no official confirmation was provided, American media reports suggested the UK could be the partner in question.
These developments have tempered fears of an escalating global trade war and contributed to an improved outlook for global oil demand.
Meanwhile, as widely expected, the Federal Open Market Committee maintained its benchmark interest rate at a range of 4.25% to 4.50%, where it has stood since December. Analysts note that lower interest rates, coupled with a weaker dollar and increased economic activity, could further lift oil prices in the coming months.
However, Fed Chair Jerome Powell warned that sustained tariff increases could further elevate inflation, slow growth, and increase unemployment. He noted that any potential rate cuts this year would be contingent on how these dynamics evolve, particularly in relation to the labor market and inflation trajectory.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr