Oil prices rose in Asian trade on Monday as traders cheered signs of progress in U.S.-China trade talks, while easing concerns over an imminent supply glut, especially in light of more sanctions on Russia, provided support.
Crude prices extended gains after a strong performance last week, after the U.S. imposed fresh restrictions on Russia’s oil industry, this time targeting the country’s biggest oil firms. Optimism over lower U.S. interest rates, before a Federal Reserve meeting this week, also aided oil prices, especially after soft inflation data released on Friday.
Brent oil futures for December rose 0.5% to $66.25 a barrel, while West Texas Intermediate crude futures rose 0.5% to $61.77 a barrel by 21:00 ET (01:00 GMT).
US, China agree to framework trade deal before Trump-Xi meeting The U.S. and China have agreed to a framework trade deal, which will be discussed when leaders Donald Trump and Xi Jinping meet later in the week, U.S. officials said over the weekend.
Washington is expected to not make good on its threat of 100% tariffs on China, while Beijing will lower its rare earth export curbs and also buy more U.S. soybean, officials said.
Trump and Xi are set to speak on Thursday in South Korea.
High-level U.S. officials met their Chinese counterparts on the sidelines of the Association of Southeast Asian Nations in Malaysia over the weekend, which Trump also attended.
Hopes of a deescalation in trade tensions between the world’s biggest economies aided oil prices, especially after a spike in tensions earlier this month battered the crude market. Traders fretted over the impact of higher tariffs and trade restrictions on oil demand in the U.S. and China.
Russia sanctions, China oil discovery in focus Oil prices remained upbeat after rallying last week on fresh U.S. sanctions against Russia, this time targeting the country’s two largest oil companies– Lukoil and Roseneft.
The sanctions are aimed at pressuring Moscow into an immediate ceasefire with Ukraine, although analysts remained skeptical over just how effective the sanctions would be, given that Russia has managed to bypass U.S. restrictions in the past.
Focus was on whether major Russian oil buyers India and China will cede to U.S. pressure.
China, the world’s largest oil importer, was also seen steadily building out its oil reserves in recent months, adding to concerns over strong oil supplies.
Local media reports announced the discovery of a major, 100 million metric ton shale oil reserve discovery in the Sichuan basin, which could help further the country’s attempts at energy independence.
