Oil prices advanced in the global commodity market on Thursday, buoyed by renewed optimism around demand despite the looming threat of increased supply from members of the Organisation of Petroleum Exporting Countries and their allies (OPEC+).
The upward momentum was supported by a drop in U.S. crude inventories, which signaled steady consumption in the world’s largest oil consumer. Data from the U.S. Energy Information Administration (EIA) showed that crude stockpiles fell by about 2 million barrels to 438.4 million barrels last week. Although the decline was slightly below analysts’ expectations of a 2.5 million barrel draw, it still underscored resilient demand.
Adding to the positive sentiment, progress in U.S.-China trade relations helped ease market jitters. Reports indicate that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet Chinese officials in Switzerland this week, marking the first formal talks since the imposition of sweeping tariffs by President Donald Trump. China confirmed that the meeting was initiated by the U.S. and reiterated its willingness to engage in constructive dialogue.
Further fueling optimism, President Trump announced on Wednesday that the U.S. would sign a trade agreement with “a large and respected” country on Thursday. While no official details were released, American media speculated that the United Kingdom may be the prospective partner. The news has helped ease fears of a deepening global trade war and improved the outlook for global oil demand.
Meanwhile, as widely anticipated, the Federal Open Market Committee (FOMC) held its benchmark interest rate steady at 4.25% to 4.50%, maintaining the range it has kept since December. Analysts suggest that lower rates, a weaker dollar, and stronger economic activity could support further increases in oil prices.
However, Federal Reserve Chair Jerome Powell cautioned that continued tariff hikes could intensify inflation, hamper growth, and elevate unemployment. He emphasized that any future rate cuts would depend on how these economic variables evolve, particularly regarding labor market conditions and inflation trends.
