Wedoany.com Report-Apr. 21, Oil prices edged higher at the week’s close, driven by positive developments in U.S. trade negotiations and shifting market dynamics. West Texas Intermediate (WTI) climbed 3.5% to settle around $65 per barrel, recording its largest two-day gain since early January.

U.S. President Donald Trump expressed confidence in securing a trade agreement with the European Union, while ongoing discussions with Japan fueled optimism for deals that could mitigate the impact of tariffs. These developments supported a more positive outlook for global trade, contributing to the uptick in oil prices.

Market activity was further influenced by investors covering short positions and algorithmic traders adopting a slightly more optimistic stance ahead of a long weekend. Trading volumes were expected to be lower due to a holiday in many countries, with oil futures markets closed on Friday.

In related news, the U.S. Treasury Department, led by Secretary Scott Bessent, imposed sanctions on Shandong Shengxing Chemical Co., a Chinese refinery, for allegedly processing over $1 billion of crude oil from Iran. This action reflects efforts to address global oil supply chains, though no further details on broader implications were provided.

Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, noted: “While the macroeconomic backdrop remains mixed, it has the potential to either amplify market rallies or derail them entirely, depending on how these geopolitical tensions evolve.” Her comments highlight the complex interplay of economic and global factors affecting oil markets.

Despite recent pressures from broad U.S. trade measures, which had earlier driven crude prices down by about 30% from their yearly peak, this week’s recovery was bolstered by domestic supply data. U.S. government reports indicated that crude inventories at Cushing, Oklahoma—the delivery hub for WTI—reached their lowest seasonal level since 2008. This tightening of supply strengthened nearby timespreads, with WTI’s prompt spread reaching its highest point since February on Wednesday.

The combination of favorable trade negotiations, reduced inventory levels, and market positioning supported the modest rebound in oil prices. As global energy markets continue to navigate economic and supply dynamics, these factors will likely shape price trends in the near term.