Oil prices rose on Friday as trade talk optimism supported the outlook for both the global economy and oil demand, outweighing news of the potential for more oil supply from Venezuela.
Brent crude futures touched a one-week high and was up 29 cents, or 0.42%, at $69.47 a barrel as of 0310 GMT. U.S. West Texas Intermediate crude futures climbed 29 cents, or 0.44%, to $66.32.
Oil, along with stock markets, gained support from the prospect of more trade deals between the U.S. and trading partners ahead of August 1, when the U.S. will impose new tariffs on goods from an array of countries.
The United States announced a trade deal with Japan on Wednesday, after which two European diplomats said the European Union was moving toward a deal involving a baseline 15% U.S. tariff on EU imports plus possible exemptions.
“Trade talk optimism appears to be offsetting expectations for stronger Venezuelan supply,” ING analysts wrote in a client note on Friday.
The U.S. is preparing to allow partners of Venezuela’s state-run PDVSA, starting with U.S. oil major Chevron, to operate with limitations in the sanctioned nation, sources said on Thursday.
Venezuelan oil exports could consequently increase by a little more than 200,000 barrels per day, which would be welcome news for U.S. refiners as it would ease tightness in the heavier crude market, ING analysts wrote.
So far this week, Brent has gained 0.4% and WTI has fallen 1.4%.
Both contracts advanced around 1% on Thursday driven by reports of cuts to Russian gasoline exports.
Also supporting the market were U.S. crude inventory draws.
U.S. Energy Information Administration data on Wednesday showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far more than the 1.6 million barrel draw estimated by analysts in a Reuters poll.
“I am encouraged by the way crude oil held and bounced away from the $65/64 support band this week, which keeps hopes intact of a rebound back towards $70,” said IG analyst Tony Sycamore, adding that next week will bring data for traders to chew over.
Economic data next week from the world’s biggest economies and oil consumers include factory activity in China and U.S. inflation, jobs and inventories.
(Reporting by Sudarshan Varadhan and Siyi Liu in Singapore; Editing by Jacqueline Wong and Christopher Cushing)