Oil prices rose on Thursday after a US court blocked most of President Donald Trump's tariffs, while the market was watching out for potential new US sanctions curbing Russian crude flows and an OPEC+ decision on hiking output in July.
Brent crude futures were up 19 cents, or 0.3%, to $65.09 a barrel at 1215 GMT. US West Texas Intermediate crude was up 24 cents, or 0.4%, to $62.08 a barrel.
A US trade court on Wednesday ruled that Trump overstepped his authority by imposing across-the-board duties on imports from US trading partners. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium using a different statute, Reuters reported.
"Markets are positive since Donald Trump got the setbacks on the tariffs," said Bjarne Schieldrop, chief commodities analyst at SEB. "That's less headwind for the global economy, so more demand for oil because the machine of the global economy moves better and faster."
The ruling buoyed risk appetite across global markets, which have been on edge over the impact of the levies on economic growth, but some analysts said the relief may only be temporary given the Trump administration has said it will appeal.
"But for now, investors get a breather from the economic uncertainty they love to loathe," said Matt Simpson, an analyst at City Index in Brisbane.
On the oil supply front, there are concerns about potential new sanctions on Russian crude. At the same time, the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, could agree on Saturday to accelerate oil production hikes in July.
"We're assuming the group will agree on another large supply increase of 411,000 barrels per day. We expect similar increases through until the end of the third quarter, as the group increases its focus on defending market share," ING analysts said in a note.
Adding to supply risks, Chevron has terminated its oil production and a number of other activities in Venezuela, after its key license was revoked by the Trump administration in March.
Venezuela in April cancelled cargoes scheduled to Chevron, citing payment uncertainties related to US sanctions. Chevron was exporting 290,000 barrels per day of Venezuelan oil, or over a third of the country's total, before that.
"From May through August, the data points to a constructive, bullish bias with liquids demand set to outpace supply," Mukesh Sahdev, global head of commodity markets at Rystad Energy, said in a note, expecting demand growth to outpace supply growth by 600,000 to 700,000 bpd.
Later on Thursday, investors will be watching for the weekly reports from the American Petroleum Institute and the Energy Information Administration, the statistical arm of the US Department of Energy.
According to market sources familiar with the API data, US crude and gasoline stocks fell last week while distillate inventories rose.
Meanwhile, a wildfire in the Canadian province of Alberta has forced residents of a small town to evacuate and prompted a temporary shutdown of some oil and gas production, which could reduce supply.
