Oil Rises Again on Hopes of a Trump-Xi Deal
Oil prices rose as the market began to believe that the United States and China would soon reach a trade agreement. Brent returned above $65.26 per barrel after surging nearly 8% last week, and WTI held near $61.40 per barrel. Negotiators from both countries said they had reached common ground on many key issues, and now only needed to wait for President Donald Trump and President Xi Jinping to meet on Thursday to finalize the deal. This sentiment sent risk assets up, and Asian stocks also rallied.
In addition to the trade peace factor, comments from US Treasury Secretary Scott Bessent also brought relief to the market. He said the threat of 100% tariffs on Chinese goods was "practically off the table." If US-China tensions ease, the outlook for global economic growth will improve. A growing economy means increased energy demand, which automatically supports oil prices.
Oil was also helped by US sanctions against Russia's two largest oil producers. These sanctions disrupted Russian oil exports to major buyers like India and China, forcing them to seek supplies from other sources. This helps keep prices from falling too far, even though global oil markets are actually worried about oversupply due to high OPEC+ production this year. Analysts say there is bullish momentum from Russian geopolitics and US-China trade hopes, but gains remain limited due to still ample global inventories.
The oil market is also showing signs of strengthening in its price structure. Short-term Brent spreads are now trending toward backwardation (near-term contracts are more expensive than subsequent contracts), which is usually interpreted as a signal of a tighter market. In morning trading in Singapore, the December Brent contract edged up 0.2% to around $66.06 per barrel, while the December WTI contract also rose 0.2% to around $61.63 per barrel. Many market participants assess Brent's "comfort zone" level as being in the upper $60s, so the market is currently optimistic but not yet euphoric. (asd)
Source: Newsmaker.id
