Oil prices gain on Russian gasoline ban, US trade optimism, crude inventories

HOUSTON: Oil prices rose on Thursday, lifted by expected cuts in Russian gasoline supply and optimism over US trade negotiations that would ease pressure on the global economy, with a further boost from a sharper-than-expected decline in US crude inventories.

Brent crude futures had gained 80 cents, or 1.17%, to $69.31 a barrel by 10:52 a.m. CDT (1552 GMT). US West Texas Intermediate crude futures climbed 97 cents, or 1.49% to $66.22 per barrel.

“Russia looking to cut off gasoline exports gave the market a boost,” said Phil Flynn, senior analyst with Price Futures Group. “The market was looking for a reason to go higher.”

Three industry sources told Reuters that Russia was considering a tighter export ban as early as Monday that would include fuel producers.

The restrictions will exclude supplies to the Moscow-led Eurasian Economic Union, a group of five former Soviet states, and to countries such as Mongolia with which Russia has intergovernmental agreements on fuel supplies, the sources said.

Early in the session, futures rose on the previous day’s report of a US crude inventory draw and on hopes for a trade deal between the US and the European Union that would lower tariffs.

“The US crude inventory draw and the trade efforts are adding some support to prices,” said Janiv Shah, an analyst at Rystad. On Wednesday, two European diplomats said the EU and the US were moving toward a trade deal that could include a 15% US baseline tariff on EU imports and possible exemptions. This could pave the way for another major trade agreement following the Japan deal.

Also on Wednesday, US Energy Information Administration data showed crude inventories fell last week by 3.2 million barrels to 419 million barrels, far exceeding analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.