Oil climbs after Trump extends EU trade talks deadline to July

Synopsis

Oil prices saw a rise in early Asian trade. This happened after US President Donald Trump extended the trade talk deadline with the European Union. Concerns about US tariffs on the EU have eased. Limited progress in US-Iran nuclear talks also helped. US firms cut operating oil rigs due to lower prices. OPEC+ may increase output next month.

Oil prices gained in early Asian trade on Monday after U.S. President Donald Trump extended a deadline for trade talks with the European Union, easing concerns about U.S. tariffs on the bloc that could hurt the global economy and fuel demand.

Brent crude futures rose 37 cents, or 0.6%, to $65.15 a barrel by 0001 GMT while U.S. West Texas Intermediate crude was up 34 cents, or 0.6%, at $61.87 a barrel.

"A nice push higher in crude oil and U.S. equity futures this morning after U.S. President Trump extended the deadline," IG market analyst Tony Sycamore said.

Trump said he agreed to extend a deadline for trade talks with the European Union until July 9 after Ursula von der Leyen, president of the European Commission, said the bloc needed more time to strike a deal.

Trade and tariff headlines, along with ongoing fiscal concerns are going to be the main wild card for risk sentiment and crude oil this week, Sycamore said.

Brent and WTI extended gains after settling 0.5% higher on Friday as limited progress in U.S.-Iran nuclear talks alleviated concerns of more Iranian oil returning to global markets and as U.S. buyers covered positions ahead of the three-day Memorial Day weekend.

Prices were also buoyed by data from energy services firm Baker Hughes that showed U.S. firms, under pressure from lower oil prices, cut the number of operating oil rigs by 8 to 465 last week, the lowest since November 2021.

The gains were capped by expectations that the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, could decide to increase output by another 411,000 barrels per day (bpd) for July at next week's meeting.

Reuters reported this month that the group could unwind the rest of its 2.2 million bpd voluntary production cut by the end of October, having already raised output targets by about 1 million bpd for April, May and June.

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