Oil Rises on Trade-Talk Optimism, Signs of Near-Term Tightness

(Bloomberg) -- Oil ticked higher, rising for a fourth straight day, on investor optimism around extended trade talks between the US and China, and signs of near-term tightness in the physical market.
Global benchmark Brent rose above $67 a barrel, while West Texas Intermediate topped $65. US Commerce Secretary Howard Lutnick said that initial discussions in London with officials from Beijing had been 'fruitful'. The negotiations are slated to continue on Tuesday.
Crude has declined this year on fears that persistent global trade tensions will sap economic growth and crimp energy demand, although progress in the latest US-China talks could ease such concerns and buoy risk assets. Oil has also been hurt as the OPEC alliance agreed to add production back to the market at a faster-than-expected clip, spurring forecasts for a glut.
'Crude has preemptively priced in a degree of success in the US-China trade talks,' said Vandana Hari, founder of Vanda Insights in Singapore. 'We may not know the outcome for another day, and I expect prices to go into a holding pattern until then.'
Oil's pricing structure points to near-term tightness, although the reverse is the case further out. Brent's prompt spread is 81 cents a barrel in backwardation, a bullish pattern, with the nearest contract trading at a premium to the next in sequence. That's up from 48 cents about a month ago.
On the geopolitical front, President Donald Trump expressed concern that Iran was seeking too much in a potential nuclear deal, including the ability to enrich uranium. He described the Iranian negotiators as tough but good. Talks will continue on Thursday, according to Trump.
To get Bloomberg's Energy Daily newsletter in your inbox, click here.
More stories like this are available on bloomberg.com

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Time of India

37 minutes ago

• Time of India

Strait of Hormuz blockade looms: Asian countries most vulnerable to Iran's trump card

Around 84 percent of oil passing through the Strait of Hormuz is destined for Asia, leaving the economies of China, India, South Korea and others vulnerable should Iran blockade the crucial trading route over US strikes on its nuclear sites. Around 14.2 million barrels of crude oil and 5.9 million barrels of other petroleum products pass through the strait per day -- representing around 20 percent of global production in the first quarter, according to the US Energy Information Administration (EIA). And crude oil from Saudi Arabia, the UAE, Iraq, Kuwait, Qatar and Iran almost exclusively passes through the corridor. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Your IQ Is 140 If You Can Answer 10 Of These Questions Correctly IQ International Undo Here are the main Asian countries where oil exported via the strait is destined: China More than half of the oil imported by East Asia passes through the Strait of Hormuz, experts estimate. Live Events China is one of the largest buyers, importing 5.4 million barrels of crude oil a day through Hormuz in the first quarter this year, according to the EIA. Saudi Arabia is China's second-largest supplier of crude oil, accounting for 15 percent of its total oil imports -- 1.6 million barrels a day. China also buys more than 90 percent of Iran's oil exports, according to the analysis firm Kpler. It imported 1.3 million barrels of Iranian crude oil a day in April, down from a five-month high in March. India India is highly dependent on the Strait of Hormuz, importing 2.1 million barrels of crude a day through the corridor in the first quarter, EIA data shows. Around 53 percent of India's imported oil in early 2025 came from Middle Eastern suppliers, particularly Iraq and Saudi Arabia, local media reported. Also Read: India safe from Strait of Hormuz closure due to diversified oil imports, says Hardeep Singh Puri Wary of an escalating conflict in the Middle East, New Delhi has increased its imports of Russian oil over the past three years. "We have been closely monitoring the evolving geopolitical situation in the Middle East since the past two weeks," India's Minister of Petroleum and Natural Gas Hardeep Singh Puri said on Sunday. "We have diversified our supplies in the past few years and a large volume of our supplies do not come through the Strait of Hormuz now," he wrote on X, adding "We will take all necessary steps to ensure stability of supplies of fuel to our citizens." South Korea Around 68 percent of South Korea's crude oil imports pass through the Strait of Hormuz -- 1.7 million barrels a day this year, according to the EIA. South Korea is particularly dependent on its main supplier Saudi Arabia, which last year accounted for a third of its oil imports. Seoul's trade and energy ministry said there have been "no disruptions so far in South Korea's crude oil and LNG imports" but "given the possibility of a supply crisis", officials were "planning for potential disruptions in the Strait of Hormuz". "The government and industry stakeholders have prepared for emergencies by maintaining a strategic petroleum reserve equivalent to about 200 days of supply," the ministry said in a statement. Japan Japan imports 1.6 million barrels of crude oil a day through the Strait of Hormuz, the EIA says. Japanese customs data showed 95 percent of crude oil imports last year came from the Middle East. The country's energy freight companies are readying for a potential blockade of the strait. "We're currently taking measures to shorten as much as possible the time spent by our vessels in the Gulf," shipping giant Mitsui OSK told AFP. Others Around 2 million barrels of crude oil passing through the Strait of Hormuz each day in the first quarter were destined for other parts of Asia -- particularly Thailand and the Philippines -- as well as Europe (0.5 million barrels) and the United States (0.4 million barrels). Limited alternatives Asian countries could diversify their oil suppliers, but it is difficult to replace the large volumes coming from the Middle East. In the short term, "elevated global oil inventories, OPEC+'s available spare capacity, and US shale production all could provide some buffer", experts at MUFG Bank said. "However, a full closure of the Hormuz Strait would still impact on the accessibility of a major part of this spare production capacity concentrated in the Persian Gulf," they said. Saudi Arabia and the UAE have infrastructure to bypass the strait, potentially mitigating disruptions, but their transit capacity remains very limited -- around 2.6 million barrels a day. And the Goreh-Jask pipeline built by Iran to export via the Gulf of Oman, which has been inactive since last year, has a maximum capacity of only 300,000 barrels per day, according to the EIA.

Business Standard

37 minutes ago

• Business Standard

Pound plunges to one-month low against dollar; GBPINR edges slightly higher

The British pound plunged to a one-month low against a firm dollar overseas as markets sentiments turned risk averse amid boiling tensions in Middle East and investor flocked to safe haven dollar for respite. The demand for the US Dollar as a safe-haven asset increased, with the US Dollar Index revisiting two-week high above 99 mark. Over the weekend, US President Donald Trump reportedly said that Washingtons military forces have successfully demolished Iranian nuclear facilities: Fordow, Natanz, and Isfahan. Meanwhile data from UK showed better-than-projected flash S&P Global Purchasing Managers Index (PMI) data for June. The Composite PMI came in at 50.7, higher than estimates of 50.5 and the prior release of 50.3. GBPUSD is currently seen quoting weaker by over half a percent at $1.3400. On the NSE, GBPINR futures are trading higher by 0.17% at 116.89.

Mint

40 minutes ago

• Mint

Italian energy major Eni sells 20% stake in renewable arm Plenitude to Ares for $2.3 billion: Details here

Italian energy group Eni SpA has sold a 20 per cent holding in its renewable business Plenitude to Ares, a US-based alternative credit management firm The deal is set at about $2.3 billion, marking the holding company's second sale of a stake in the unit, reported Bloomberg. The transaction is based on the value of Plenitude's equity shares, which is around $11.4 billion. The enterprise value stood at more than $13.7 billion, the renewable business said in a statement. Eni said in May it was in exclusive talks with the company over the sale, the news agency said. 'The valuation of Plenitude has positive implications for the stock as it allows further value to be unlocked in one of Eni's satellites,' reported Bloomberg citing Massimo Bonisoli, an analyst at Equita Group SpA. The company completed the sale of 10 per cent of Plenitude to Energy Infrastructure Partners earlier this year. Eni shares remained stable as of 10:33 am local time, while the Milan stock index fell by 0.6 per cent. Eni stock initially gained as much as 0.9 per cent. The energy major has said it also plans to sell stakes in its businesses in biofuels and mobility arm Enilive, where US-based KKR & Co bought a 25 per cent holding earlier this year. It is in exclusive talks for a stake in its carbon capture and storage unit, the news agency said. Milan-based Plenitude was set up to hold Eni's energy retailing and renewables businesses. Initial plans for a public listing of Plenitude have been put on hold. Ares, an alternative asset manager overseeing nearly $550 billion, has recently opened an office in Milan, Italy's financial hub, in order to expand its business in that market.