Oil prices climbed on Monday after a key move by the U.S. President boosted market optimism. Donald Trump extended the deadline for trade talks with the European Union. This decision reduced fears of new U.S. tariffs that could weaken global demand.
As a result, Brent crude rose by 26 cents to $65.04 a barrel. Likewise, U.S. West Texas Intermediate (WTI) crude gained 24 cents to reach $61.77 a barrel. The oil market welcomed the news, pushing both crude types higher early in the day.
IG market analyst Tony Sycamore said that oil and equity markets received “a nice push” after Trump extended the deadline. He explained that trade headlines and fiscal uncertainty will shape risk sentiment and oil prices in the coming days.
Trump agreed to extend the deadline until July 9. This came after Ursula von der Leyen, president of the European Commission, asked for more time to reach a deal.
Oil prices also rose last Friday, gaining about 0.5%, helped by limited progress in U.S.-Iran nuclear talks. This stalled fears of Iran returning with more oil exports. In addition, U.S. buyers entered the market ahead of the Memorial Day holiday, supporting prices.
Moreover, oil got a boost from U.S. oil rig data. Energy services firm Baker Hughes reported that drilling firms cut eight rigs last week. This brought the total to 465—the lowest level since November 2021.
However, gains could slow due to OPEC+ decisions. The group, which includes Iraq, may raise output by another 411,000 barrels per day (bpd) in July. According to DBS Bank energy analyst Suvro Sarkar, oil faces pressure from OPEC+’s faster output increase and a “mini oil price war.”
In fact, Reuters recently said that OPEC+ may end its 2.2 million bpd voluntary cut by October. Already, the group raised output targets by 1 million bpd for April through June.
ING’s Warren Patterson noted that increased OPEC+ output should keep oil supply steady during the rest of the year. Iraq, a major member of the group, supports steps that ensure market stability.