WASHINGTON (dpa-AFX) - Despite the truce in the Middle East, crude oil posted gains on Friday in the wake of the US confirming readiness to sign trade deals with China and multiple other trading partners and indications of strong summer demand in the US.
WTI Crude Oil closed up by $0.28 to settle at $65.52 per barrel today.
August month Brent Crude was last seen trading up $0.18, to $67.91 per barrel today.
Oil prices initially surged on Monday after the US bombed Iranian nuclear sites last weekend but plummeted after the US President Donald Trump announced a ceasefire.
The anxiety about a long-lasting Middle Eastern conflict between Israel and Iran, which could have triggered a major supply crisis, has now faded due to the truce, which has been holding so far with no reports of violations by either side.
During the 12-day war, much of the risk-premium associated with oil which drove it to record high prices was due to the threat of disruption to the Strait of Hormuz. As much as 20% of global oil transit takes place through this strait.
As that threat has disappeared, investors are focused on pricing based on demand-supply fundamentals. As of now, globally supply is more than the demand.
A report from the US Energy Information Administration on Wednesday revealed that crude and oil inventories fell by 5.9 million barrels last week. Along with this, the high demand foreseen in the US due to the summer travel season also contributed to today's earlier price rise.
Oil and energy traders are now focused on the upcoming July 6th meeting of OPEC+, where another hike in production by 411,000 bpd is likely to be approved.
The organization is keen on grabbing market share as production in North America and South America is increasing. Reports suggest that Russia, a key member, may agree to ramp up production.
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