08:46 AM EDT, 07/23/2025 (MT Newswires) -- Oil prices fell for a fourth session early on Wednesday even as a report showed a drop in U.S. oil inventories while the United States reached a trade deal with Japan that imposes a 15% tariff on imports from Tokyo.

West Texas Intermediate crude for September delivery was last seen down US$0.45 to US$64.86 per barrel, while September Brent crude fell US$0.51 to US$68.08.

The drop comes as the American Petroleum Institute's weekly survey showed private U.S. oil inventories fell by 0.58-million barrels last week, showing summer demand continues to run hot even as supply is on the rise as OPEC+ continues the return of 2.2-million barrels per day of production cuts. The Energy Information Administration will release official inventory data later on Wednesday morning.

U.S. President Donald Trump's administration reached its tariff deal with a major trading partner on Tuesday, as Japan agreed to see its exports subject to a 15% tariff, including autos, down from a proposed 25% levy. The agreement is the first to come ahead of Trump's Aug.1 deadline to reach trade deals but comes as Japan's government was weakened after losing control of the country's upper house in an election this week. It is not expected to set a template for other deals for U.S. trade partners, as the European Union readies readies retaliatory levies on U.S. products.

"The Wall Street Journal reports EU officials are now drafting retaliation plans that go beyond tit-for-tat tariffs. Those include new digital service levies, procurement restrictions, and the potential use of the E.U.'s "anti-coercion instrument," which can target US services and block its ambition in European business tenders among other penalties," PVM Oil Associates noted.