Oil prices rose during Asian trade on Monday after United States and Chinese officials expressed optimism over the weekend about progress in trade negotiations, lifting sentiment around energy demand from the world’s two largest crude consumers.
At 2:55 pm AEST (4:55 am GMT), Brent crude futures for July delivery were up $0.34, or 0.5%, at $64.25 per barrel, while U.S. West Texas Intermediate (WTI) crude for June rose $0.36, or 0.6%, to $61.38.
Both benchmarks gained more than $1 on Friday and advanced over 4% for the week - marking their first weekly rise since mid-April. The gains were supported by growing optimism after the U.S. reached a trade agreement with the United Kingdom, alleviating some investor concerns over global economic disruption from escalating U.S. tariffs.
U.S.-China talks concluded on a positive note on Sunday in Geneva, with U.S. officials promoting a deal aimed at reducing the American trade deficit. Chinese representatives described the outcome as reaching an “important consensus”.
However, ANZ analysts noted in a client briefing: "Concerns over higher supply continue to hang over the market. OPEC's move to accelerate production hikes signals a significant shift in supply policy. Saudi Arabia, the de facto leader of the OPEC group, doesn’t appear to be afraid of lower oil prices but it does appear to be becoming less tolerant of over-producing members."
Meanwhile, discussions between U.S. and Iranian officials in Oman over Tehran’s nuclear programme ended on Sunday, with both sides planning further talks. Despite diplomatic engagement, Tehran has maintained its commitment to uranium enrichment.
A successful U.S.-Iran nuclear agreement could ease global supply constraints and potentially lower oil prices by allowing more Iranian crude to reach the market.
In addition, energy services firm Baker Hughes reported on Friday that U.S. energy companies had cut the number of active oil and gas rigs to the lowest level since January, further influencing supply outlooks.
