Oil Prices Edge Higher as U.S. and China Ease Trade Tensions
Oil prices climbed on Tuesday as early signs of reduced tension between the United States and China lifted market confidence and eased concerns over global fuel demand.
U.S. President Donald Trump remains committed to meeting Chinese President Xi Jinping later this month in South Korea, Treasury Secretary Scott Bessent said on Monday. Both nations have been seeking to defuse recent disputes over tariffs and export restrictions.
Bessent confirmed that there were extensive communications between Washington and Beijing over the weekend, with more meetings expected soon.
Brent and WTI Extend Modest Gains
Brent crude futures rose by 22 cents, or 0.4%, to $63.54 per barrel by 04:05 GMT, while U.S. West Texas Intermediate (WTI) crude gained 22 cents to $59.71 per barrel. In the previous session, Brent settled 0.9% higher, and WTI closed up 1%.
“Oil steadied as investors weighed U.S.–China tensions against demand,” analysts at Saxo Bank noted, emphasizing that President Trump appeared to have softened his tone and signaled willingness for a potential trade deal.
Historically, improved trade relations between the world’s two largest economies have supported oil markets, as investors expect stronger global growth and higher energy consumption.
Market Sentiment Balances Trade Progress and Geopolitical Risks
Despite the optimism, recent developments have kept traders cautious. Beijing’s expanded export controls on rare earth materials and Trump’s renewed threats of 100% tariffs and software export curbs from November 1 have raised new uncertainties.
Last week, crude prices recorded weekly declines, hitting their lowest levels since May. Trump also questioned the likelihood of his meeting with Xi at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea on October 30–November 1, posting on Truth Social, “Now there seems to be no reason to do so.”
Analysts believe the market’s recent selloff has been tempered by a more conciliatory tone between Washington and Beijing, but geopolitical concerns are expected to remain in focus.
“The oil industry continues to navigate multiple global issues,” said ANZ analyst Daniel Hynes. “China announced new levies on U.S.-owned vessels arriving at its ports, including oil tankers. That announcement led to several last-minute cancellations and a surge in shipping rates.”
OPEC+ Sees Market Balancing Ahead
Further limiting gains, President Trump declared the end of the two-year Gaza war on Monday, easing some geopolitical risk across the Middle East.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, reported in their monthly outlook that the global oil supply deficit is expected to narrow in 2026. The OPEC+ group reaffirmed its commitment to gradual output increases as demand stabilizes.
