Global crude oil prices rose on Monday following a new trade agreement between the United States and the European Union, alongside remarks from former U.S. President Donald Trump threatening tariffs unless Russia ends its invasion of Ukraine sooner than expected.
Brent crude jumped $1.18 (1.7%) to reach $69.62 per barrel, while West Texas Intermediate (WTI) gained $1.16 (1.8%) to trade at $66.32 on Monday afternoon.
Trump announced he would shorten the 50-day deadline he previously set for Russia to cease hostilities in Ukraine. If unmet, he warned of severe tariffs on Russian goods.
According to Tony Sycamore of IG Markets, the trade pact with the EU, along with discussions to extend the current U.S.-China tariff truce, are supporting investor sentiment across both financial and commodity markets.
The provisional deal with the EU establishes a 15% import tariff on most goods entering the U.S., with the EU pledging to purchase $750 billion worth of American energy products over the coming years.
Senior officials from Washington and Beijing were scheduled to meet in Stockholm on Monday to determine the future of their tariff truce ahead of an August 12 deadline.
Reuters, quoting PVM analyst Tamas Varga, stated that “The U.S.-EU deal removed another layer of uncertainty and the focus seems to be shifting back towards fundamentals,” although factors like a strong dollar and declining oil imports from India continue to weigh on global crude demand.
On the supply front, the OPEC+ alliance is expected to hold off on any significant production changes during its meeting, multiple delegates informed Reuters. The group is likely to continue with its plan to gradually restore 2.2 million barrels per day in previously withheld output by the end of September, according to ING analysts.
