Oil Holds Gains After Trump-Xi Call Signals Easing Trade Tension
Oil was steady after advancing Thursday on optimism around easing trade tensions between the US and China following a call between the leaders of the two countries.
Brent traded around $65 a barrel and was on track for its first weekly gain since mid-May, while West Texas Intermediate was near $63. President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to further trade talks aimed at resolving disputes over tariffs and supplies of rare earth minerals.
Oil has traded in a relatively narrow range since the middle of May as optimism over the progress of trade talks was tempered by the prospect of OPEC+ returning more barrels to the market, potentially exacerbating a glut forecast for later in 2025. Futures have slid about 12% this year on concerns that US-led tariffs wars will sap energy demand.
Investors are watching whether Saudi Arabia will push for the cartel to continue with accelerated returns of shuttered-in oil supply in the coming months to regain lost market share. The Organization of the Petroleum Exporting Countries and its allies will next meet to decide on production levels on July 6.
In options markets, investors have ramped up wagers that OPEC+ output hikes will lead to an eventual glut toward the end of this year and into 2026. Open interest in calendar spread options — the difference between West Texas Intermediate crude’s value over different delivery months — this week reached a record high, according to CME Group.
Brent for August settlement declined 0.2% to $65.19 a barrel at 8:29 a.m. in Singapore. WTI for July delivery slipped 0.3% to $63.19 a barrel.
Source: Bloomberg
