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Oil Extends Gain on US Trade Deal Optimism, Diesel Tightness - BLOOMBERG
BY Rong Wei Neo and Yongchang Chin
(Bloomberg) -- Oil rose a second day on optimism over US trade talks ahead of next week’s deadline, and as tightness in diesel markets boosts sentiment.
Brent crude advanced toward $70 a barrel after adding 1% on Thursday, while West Texas Intermediate traded above $66. Indian Commerce Minister Piyush Goyal said he was confident that his country could reach an agreement with the US before Aug. 1, while Brazil and Mexico looked to broaden trade ties.
Meanwhile, diesel prices have soared, leading to steep premiums for niche crude grades that yield more of the fuel and injecting much-needed strength into a bogged down oil market. The latest European Union measures restricting Russian energy imports have also added to the tightness, according to TotalEnergies SE.
Crude has remained in a holding pattern this month, but is down for the year as increased supply from OPEC+ adds to concerns over a looming glut. The group will next meet on Aug. 3 to decide on production levels.
“As summer demand wanes and surging crude supply continues into the fall, we think global crude inventories will rise sharply,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. Brent prices are likely to decline toward $60, he said.
