Oil prices continue their upward momentum

Brent crude futures on ICE rose 0.35 percent to $68.76. The rally gained momentum after a larger-than-expected drawdown in U.S. crude inventories. The Energy Information Administration reported a decline of 3.9 million barrels last week, beating its estimate of a modest 552,000 barrel draw, suggesting increased refinery activity and tightening supply.

"There is support from the favourable margin environment in the refining sector. Product spreads remain wide in key regions," said John Paisie, President of Stratas Advisors.

However, surprise increases in gasoline and diesel inventories capped gains, signaling a potential softening in fuel demand.

From a technical perspective, Brent has broken through the key resistance level of $68.91 and is now poised to test the next resistance level at $69.66. However, analysts warn that a break below $67.33 could revive the downtrend, with downside risk reaching as low as $ 63.99.

Boosting sentiment, President Donald Trump announced progress on several trade fronts, including lifting a ban on AI chip sales to China and advancing agreements with Indonesia and India. These developments, along with strong Chinese crude oil production data, which rose 8.5% in June, helped ease global demand concerns.

Despite the optimism, uncertainty over permanent trade tariffs continues to cloud the long-term outlook, and analysts warn that global economic headwinds could limit gains in oil prices.