Oil holds ground following US-Japan trade deal

ICE Brent crude has gained some momentum amid growing market optimism following a new US-Japan trade deal that could boost oil demand growth.

IMAGE: Flags of the US and Japan. Getty Images

Washington and Tokyo have signed a comprehensive trade agreement that includes a reduction in tariffs on all Japanese imports, US President Donald Trump said on social media platform Truth Social.

Under the agreement, Japan's auto sector will see a tariff of 15%, down from a total of 27.5% levies earlier, according to a Reuters report.

Duties on other Japanese goods that were scheduled to come into effect from 1 August will also be lowered to 15% from 25%.

As part of the deal, Japan has also agreed to invest $550 billion in the US, Trump said.

The deal has "buoyed the mood in the financial markets,” said VANDA Insights’ founder Vandana Hari.

The trade deal comes days ahead of Trump 1 August tariff deadline. It “appeared to put a floor under [oil] prices after three straight sessions of losses,” Hari added.

The deal also states that Japan will increase purchase for US goods, including cars, agricultural products like rice and more, Reuters reported citing a US administration official.

By Aparupa Mazumder

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