TOKYO: Oil prices rose around 1 percent on Thursday, buoyed by optimism over US trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in US crude inventories.

Brent crude futures gained 64 cents, or 0.9 percent, to $69.15 a barrel by 8:30 a.m. Saudi time. US West Texas Intermediate crude futures climbed 68 cents, or 1 percent, to $65.93 per barrel.

Both benchmarks were little changed on Wednesday as markets monitored developments in US-European Union trade talks, following President Donald Trump’s tariff deal with Japan. The agreement lowers duties on auto imports and spares Tokyo from new levies in exchange for a $550 billion package of US-bound investment and loans.

“Buying was driven by optimism that progress in tariff negotiations with the US would help avoid a worst-case scenario,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

“Still, uncertainty over US-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains,” he said, predicting WTI would likely remain range-bound between $60 and $70.

Two European diplomats said on Wednesday that the EU and the US are moving toward a trade deal that could include a 15 percent US baseline tariff on EU goods and possible exemptions, potentially paving the way for another major trade agreement following the Japan deal.

On the supply side, US Energy Information Administration data showed US crude inventories fell last week by 3.2 million barrels to 419 million barrels, exceeding analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.

Gasoline stocks also fell by 1.7 million barrels to 231.1 million barrels, nearly double the expectations for a 908,000-barrel draw. Distillate stockpiles, including diesel and heating oil, rose by 2.9 million barrels in the week to 109.9 million barrels — still near their lowest seasonal level since 1996, ANZ analysts said in a note.

“This suggests demand over the northern hemisphere summer has been relatively strong,” ANZ said.

Meanwhile, geopolitical tensions remained in focus.

Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders.

Separately, foreign oil tankers were temporarily barred from loading at Russia’s main Black Sea ports due to new regulations, two industry sources said on Wednesday, effectively halting exports from Kazakhstan through a consortium partly owned by US energy majors.

The US energy secretary said on Tuesday that the US would consider sanctioning Russian oil to end the war in Ukraine. Meanwhile, the EU on Friday agreed its 18th sanctions package against Russia, lowering the price cap for Russian crude.