Oil prices increased on Monday following positive remarks from both the US and China during weekend trade talks. The progress in negotiations had boosted market sentiment, suggesting a potential resolution to the trade dispute between the world’s two largest crude consumers.
Brent crude futures climbed 43 cents, or 0.67%, to $64.34 a barrel by 0500 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading at $61.50 a barrel, up 48 cents, or 0.79%, from Friday’s close.
Both benchmarks rose more than $1 on Friday and gained over 4% last week for their first weekly gains since mid-April, after a U.S. trade deal with Britain swelled investors’ optimism that economic disruptions from U.S. tariffs on trading partners may be avoided.
The United States and China ended trade talks on a positive note on Sunday, with U.S. officials touting a deal to reduce the U.S. trade deficit, while Chinese officials said both had reached an important consensus.
However, neither side released any details of the talks with Chinese Vice Premier He Lifeng, saying a joint statement would be issued on Monday.
Positive talks between the world’s two largest economies could help boost crude demand as trade, currently disrupted by massive tariffs levied by both countries, is restored between them.
“Optimism over constructive U.S.-China talks supported sentiment, but limited details and OPEC’s plan to raise output capped gains,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Tazawa was referring to plans by the Organisation of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, to accelerate output hikes in May and June that will add more crude to the market.
Reuters survey found that OPEC oil output edged lower in April
Additionally, talks between Iranian and U.S. negotiators to resolve disputes over Tehran’s nuclear programme ended in Oman on Sunday with further negotiations planned, officials said, as Tehran publicly insisted on continuing its uranium enrichment.
A U.S.-Iran nuclear deal could alleviate concerns about a lower global oil supply and pressure oil prices.
Energy services firm Baker Hughes said that last week, U.S. energy firms cut the number of oil and natural gas rigs operating to their lowest level since January.
