FX.co ★ Crude Oil Surges Nearly 5% on Trade Optimism

On Wednesday, WTI crude oil futures saw a notable increase of 4.9%, closing at $68.1 per barrel. This rise followed President Donald Trump's announcement of a preliminary trade agreement with China, which has heightened expectations for boosted energy demand from the world’s two leading economies. The deal outlines China's commitment to supply rare earth minerals and the U.S.'s intention to ease restrictions on Chinese students; however, the agreement awaits final approval. Analysts highlighted that although trade-related risks have diminished, uncertainty persists regarding the agreement's overall impact on global demand. Concurrently, tensions with Iran continue, with Tehran threatening U.S. bases should nuclear negotiations collapse, thereby maintaining pressure on oil supply. On the production front, OPEC+ is set to enhance output by 411,000 barrels per day in July, in alignment with its planned gradual reduction of production cuts. Conversely, U.S. supply has contracted as evidenced by a significant decrease in crude inventories, which dropped by 3.64 million barrels last week—exceeding the anticipated 2.5 million-barrel reduction—indicating either reinforced demand or tighter supply conditions, according to data from the Energy Information Administration (EIA).