Oil Prices Rebound on Strong Economic Data and Easing Trade Tensions

Oil prices edged higher in early Thursday trading, reversing the previous day’s losses, as encouraging economic signals from top oil-consuming nations and signs of easing global trade tensions supported market sentiment. Brent crude rose 27 cents (0.39%) to $68.79 a barrel, while U.S. West Texas Intermediate (WTI) climbed 31 cents (0.47%) to $66.69. Both benchmarks had dropped more than 0.2% in the prior session.

The U.S. Energy Information Administration reported a sharper-than-expected drop in crude inventories, falling by 3.9 million barrels to 422.2 million barrels last week. This outpaced analysts’ forecasts of a 552,000-barrel decline, indicating tighter supply, stronger refinery activity, and rising demand. However, larger-than-expected builds in gasoline and diesel stocks tempered gains.

John Paisie, president of Stratas Advisors, noted continued support from favorable refining margins, with product spreads remaining relatively wide across regions. He added that the recent easing of U.S.-China trade restrictions, including the lifting of a ban on AI chip sales and a new trade agreement with Indonesia, also provided bullish momentum.

China’s Q2 economic slowdown was less severe than feared, partly due to front-loading ahead of U.S. tariffs. June data showed an 8.5% year-on-year increase in Chinese crude oil throughput, signaling stronger fuel demand from the world’s largest oil importer.

In the U.S., the Federal Reserve’s latest report showed modest economic growth, though future expectations remain neutral to slightly pessimistic amid ongoing concerns over inflation driven by tariffs.

President Donald Trump expressed optimism over a potential drug-related agreement with China and hinted at near-term trade deals with India and Europe. Analysts remain cautious, however, as prolonged trade tensions and tariffs could weigh on global growth and curb long-term fuel demand, limiting oil’s upside.