Brent Crude Rises to $68.25 | US-EU Trade Deal and Fed Policy Uncertainty Drive Energy Market

Brent Crude Rises to $68.25 | US-EU Trade Deal and Fed Policy Uncertainty Drive Energy Market

Current Status and Movement of Brent Crude

As of July 28, 2025, Brent crude oil is trading at $68.25 per barrel on the international market. After reaching a high of $69 late last week, it declined slightly and has since shown signs of recovery. The 24-hour low was $67.59, indicating moderate volatility. Meanwhile, WTI crude is trading at $65.48, with the price spread remaining in the high $2 range. Refining and transportation costs, inventory levels, and seasonal factors influence this gap.

Impact of the US-EU Trade Agreement on Oil Prices

The United States and the European Union signed a major trade agreement including the energy sector following a summit held in Scotland. President Trump announced that the EU has agreed to purchase $750 billion worth of US energy products and invest more than $600 billion into the American economy. This agreement is expected to significantly boost European demand for US crude oil and natural gas, especially in efforts to reduce dependence on Russian energy. This shift in supply-demand dynamics is adding upward pressure to Brent prices.

Federal Reserve Policy and Interest Rate Trends

Another critical factor for the energy market is the policy direction of the Federal Reserve. As inflation starts to moderate, a pause in rate hikes has become a realistic possibility. Investors are watching for signs of a "rate hold to dollar weakening to commodity appreciation" pattern. Key economic indicators such as nonfarm payrolls, GDP growth, and the PCE deflator will be closely monitored this week. Additionally, statements by Fed officials at the upcoming Jackson Hole meeting will be closely scrutinized for longer-term policy cues.

OPEC Production Reports and China’s Strategic Reserve

On the supply side, OPEC is expected to release its July production self-report later this week. Focus will be on the compliance of five key member nations and projections for future output levels. At the same time, China’s expansion of its Strategic Petroleum Reserve (SPR) and renegotiated long-term contracts are viewed as positive signals for demand. These developments could influence spot pricing in Asia and potentially shift the global supply-demand balance.

Technical Analysis: Key Price Levels

Short-term technical levels to watch include:

• Resistance: $69.89
• Support: $66.95

The current price is fluctuating between these zones. Although price direction remains uncertain in the short term, momentum indicators such as MACD and RSI continue to show a bullish bias, and trading volume is increasing.

Conclusion and Market Outlook

The current Brent crude price reflects a complex mix of modest supply tightening, geopolitical risk, and shifting monetary policy. The strengthened economic ties between the US and EU suggest a sustained increase in energy demand. On the supply side, developments within OPEC+ and US shale production remain key variables. In the short term, a breakout above $70 is plausible, but any fall below $66 could trigger short-term risk aversion. Over the medium term, the pace of global economic recovery and interest rate trajectories will be crucial to watch.

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