Oil settles higher as US, China try to de-escalate trade tensions
Oil prices rose on Monday after assurances that U.S. President Donald Trump will meet his Chinese counterpart Xi Jinping later in October, easing a flare-up in trade tensions between the world’s top two economies that had pushed crude benchmarks to five-month lows on Friday.
Brent crude futures settled 59 cents higher, or 0.9%, at $63.32 a barrel, and U.S. West Texas Intermediate crude futures also closed up 59 cents, or 1%, at $59.49 a barrel.
Both contracts fell around 4% on Friday to settle at their lowest since May, after Trump threatened to cancel the meeting with Xi and to impose steep new tariffs on imports from China.
However, U.S. Treasury Scott Bessent said on Monday that the meeting between the U.S. and Chinese leaders remains on track to be held in South Korea in late October, and noted substantial communications between the two sides over the weekend.
"We have substantially de-escalated," Bessent said in an interview with Fox Business Network.
The selloff in markets now looked to be capped by Washington and Beijing’s willingness to negotiate, DBS analyst Suvro Sarkar said, adding the near-term outlook hinged on the eventual outcome of the trade talks.
Oil prices tumbled in March and April at the height of trade tensions between the two countries.
"Any reduction in international trade can only be bearish for oil," PVM energy analysts said in a note to clients.
On the demand side, China’s crude imports in September rose 3.9% from a year earlier to 11.5 million barrels per day, customs data showed.
Meanwhile, the Organization of the Petroleum Exporting Countries kept its relatively high global oil demand growth forecasts unchanged for this year and next.
In a monthly report on Monday, OPEC implied that the oil market will see a much smaller supply deficit in 2026 as the wider OPEC+ group pushes ahead with output increases.
Meanwhile, prospects of peace in the Middle East limited gains in oil prices. Palestinian militant group Hamas freed the last 20 surviving Israeli hostages on Monday under a U.S.-brokered ceasefire deal.
Source: Reuters.com
