Oil prices saw a significant rise of over $2 in Asian trading on Monday after both the United States and China agreed to ease some of their tariff measures, offering a hopeful sign toward resolving their ongoing trade dispute. This development has boosted investor confidence, especially given that both countries are among the world’s largest consumers of crude oil.
Brent crude futures jumped by $2.11, or 3.3%, reaching $64.14 a barrel by 0714 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude rose to $63.14 a barrel, marking a $2.12 increase or a 3.47% surge compared to Friday’s closing prices.
The tariff suspension, covering 24% of additional ad valorem duties, will last for an initial period of 90 days. This came following trade discussions held in Geneva over the weekend, where both sides expressed optimism about the future of their economic relationship.
Last week also saw strong performance in the oil market, with both Brent and WTI benchmarks rising by more than $1 on Friday and gaining over 4% for the week — their first weekly increase since mid-April. This followed a separate U.S. trade deal with Britain, which had already begun to lift investor optimism about the broader global trade environment.
What are your thoughts on this latest development? Do you think the easing of tariffs will lead to lasting improvements in global trade? Share your opinion in the comments below — we’d love to hear from you and discuss it further!
According to Reuters, trade talks between the U.S. and China concluded positively on Sunday, with U.S. officials emphasizing a “deal” aimed at reducing the U.S. trade deficit. Chinese officials echoed this by stating that both parties had reached an “important consensus.” Analysts believe that improved trade relations between the two economic giants could stimulate crude demand as trade flows normalize.
Toshitaka Tazawa, an analyst at Fujitomi Securities, pointed out that OPEC’s intention to raise output may limit price gains. OPEC+, the alliance of the Organization of the Petroleum Exporting Countries and its partners, has plans to accelerate production increases in May and June. Despite this, a recent Reuters survey showed that OPEC’s oil output slightly declined in April.
Under the new tariff policy, the U.S. and U.K. aim to remove certain trade barriers, promoting smoother commerce between the two nations.
Additionally, talks between Iranian and U.S. negotiators regarding Tehran’s nuclear program wrapped up in Oman on Sunday, with further negotiations scheduled. Any potential agreement may ease global oil supply concerns, which in turn could apply downward pressure on prices.
Furthermore, data from energy services firm Baker Hughes revealed that U.S. energy companies have cut the number of operating oil and gas rigs to the lowest level since January, a move that may also influence supply dynamics in the coming weeks.
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