OIL FUTURES: Crude rises on US-EU trade progress, economic data boost

Crude oil futures rose in mid-afternoon Asian trade on July 25 as market optimism grew on progress in trade negotiations between the US and its trading partners ahead of the Trump-imposed Aug. 1 deadline.

At 3:38 pm Singapore time (0738 GMT), the ICE September Brent futures contract was up 42 cents/b (0.61%) from the previous close at $69.60/b, while the NYMEX September light sweet crude contract was up 39 cents/b (0.59%) from the previous close at $66.42/b.

Oil market investors adopted a risk-on approach following progress in trade talks between the US and the EU, analysts said.

The EU said a trade agreement with the US was "within reach" after negotiations on July 24. A successful deal could result in a blanket 15% tariff on EU imports into the US, halved from the previously planned 30% set to take effect Aug. 1.

"On the geopolitical front, markets responded positively to reports of progressing trade negotiations between Washington and Brussels, which could be a potential catalyst for reviving industrial output and energy demand across Europe, which has been lagging amid sluggish post-winter recovery," Priyanka Sachdeva, senior market analyst at Phillip Nova, said.

Bullish macroeconomic data also supported oil prices.

Initial jobless claims in the US fell by 4,000 from the previous week to 217,000 in the week ended July 19, according to the latest data from the US Department of Labor.

"This marks the sixth consecutive decline in initial claims and the lowest level since April," Tony Sycamore, IG market analyst, said.

Meanwhile, the S&P Global US Services Purchasing Manager's Index rose to 55.2 in July, up from 52.9 in June and exceeding market expectations of 53. The July reading marked the sharpest expansion in private services activity this year.

Conversely, and possibly capping gains in the crude oil complex, the S&P Global US Manufacturing PMI contracted to 49.5 in July, marking the first decline in factory activity this year.

"The bullish enthusiasm remains tempered by lingering concerns over global growth, particularly with US economic indicators showing signs of moderation," Sachdeva added.

Looking ahead, market participants are focused on the US personal consumption expenditures index -- the Federal Reserve's preferred inflation gauge -- for June, set for release July 31.

"For June, inflation data is expected to show some early signs of the inflationary impact of tariffs. The preliminary expectation is for the headline PCE price index to rise to 2.5% year-over-year, while the core measure is expected to remain at 2.7% year-over-year," Sycamore said.

Dubai crude

Dubai crude swaps and intermonth spreads were mixed in the mid-afternoon Asian trading on July 25 from the previous close.

The September Dubai swap was pegged at $68.95/b at 2:05 pm Singapore time (0605 GMT), down by 29 cents/b (0.42%) from the previous Asian market close.

The August-September Dubai swap intermonth spread was pegged at 96 cents/b, wider by 4 cents/b over the same period, and the September-October Dubai swap intermonth spread was pegged at 87 cents/b, wider by 3 cents/b over the same period.

The September Brent-Dubai exchange of futures for swaps was pegged at 90 cents/b, wider by 39 cents/b over the same period.