Oil Prices Edge Higher on US-UK Trade Deal Hopes Despite Demand Concerns

Oil prices rose slightly in Asian trading on Thursday after U.S. President Donald Trump hinted at a new trade agreement with a major economy, reportedly the UK, boosting market optimism. Brent crude futures for July climbed 0.5% to $61.41 a barrel, while West Texas Intermediate (WTI) gained 0.6% to $58.02.

The modest rebound follows a steep drop on Wednesday, with prices still hovering near four-year lows. The dip was driven by mixed U.S. inventory data, signaling cooling fuel demand, and ongoing concerns over global economic weakness.

While Trump’s announcement of a “major” trade deal provided short-term support, uncertainty around his broader tariff agenda continues to weigh on oil markets. The President had previously imposed sweeping reciprocal tariffs, with a 90-day exemption granted to all countries except China. Talks with Beijing are ongoing, but Trump reaffirmed he has no intention of lowering the current 145% tariffs, adding further strain to U.S.-China trade relations.

Investor sentiment remains fragile amid rising fears of a global economic slowdown. The Federal Reserve’s decision to hold interest rates steady, coupled with warnings of increased economic risks from trade disruptions and potential inflation, has added to market volatility.

Adding to bearish pressure, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced plans to ramp up oil production significantly in June. However, this was partially offset by reports from several major U.S. producers indicating a slowdown in domestic output due to falling prices and reduced capital spending.

Despite Thursday’s uptick, crude markets remain under pressure from a combination of sluggish demand and rising supply. Traders are closely watching upcoming economic data and geopolitical developments for further direction in oil prices.