Oil Rises on Japan Trade Deal and Stronger Demand Indicated by US Inventories

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(Reuters) – Oil prices steadied in early trading on Wednesday after falling for three consecutive sessions as a U.S. trade deal with Japan signaled progress on tariffs and a poll showed U.S. crude stockpiles fell last week, indicating stronger demand.

Brent crude futures rose 33 cents, or 0.48%, to $68.92 a barrel by 0023 GMT. U.S. West Texas Intermediate crude futures rose 33 cents, or 0.51%, to $65.64 per barrel.

President Donald Trump said on Tuesday that the U.S. and Japan had struck a trade deal that includes a 15% tariff on U.S. imports from Japan. He also said Japan had agreed on $550 billion in investments in the U.S.

Oil had fallen in the previous session after the EU said it was considering countermeasures against U.S. tariffs, as hope faded for a deal ahead of the August 1 deadline.

And U.S. crude oil stockpiles were expected to have fallen last week, along with distillate and gasoline inventories, an extended Reuters poll showed on Tuesday.

Nine analysts polled by Reuters ahead of weekly inventory data estimated on average that crude inventories fell by about 1.6 million barrels in the week to July 18.

U.S. crude and gasoline stocks fell last week while distillate inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.

In another bullish sign for the market, the U.S. energy secretary said on Tuesday that the U.S. would consider sanctioning Russian oil to end the war in Ukraine.

The EU on Friday agreed its 18th sanctions package against Russia, lowering the price cap for Russian crude. But analysts said a lack of U.S. participation would hinder the effectiveness of the package.

Reporting by Colleen Howe; Editing by Muralikumar Anantharaman