Oil prices dipped slightly on Friday, though they remained on track to post their first weekly gain in three weeks, as renewed trade discussions between U.S. President Donald Trump and Chinese President Xi Jinping raised optimism about global growth and energy demand.
As of 06:34 GMT, Brent crude futures slipped 11 cents (0.2%) to $65.23 per barrel, while U.S. West Texas Intermediate (WTI) crude edged down 12 cents (0.2%) to $63.25, after rising by about 50 cents in the previous session.
Despite the modest daily decline, both benchmarks were poised to end the week higher following two consecutive weeks of losses. Brent was up 2.1% on the week, while WTI had climbed roughly 4%.
Trade Developments Fuel Market Optimism
According to China’s Xinhua news agency, the trade call between Trump and Xi was initiated at Washington’s request. Trump later described the conversation as reaching a “very positive conclusion,” claiming the U.S. was in a “very good position” with China regarding the trade agreement.
Meanwhile, Canada also continued trade talks with the U.S., with Prime Minister Mark Carney in direct communication with Trump, as confirmed by Industry Minister Melanie Joly.
The oil market remains sensitive to developments in tariff negotiations, as well as economic data showing how global trade tensions are impacting demand and growth prospects.
Geopolitical and Supply Risks in Focus
Analysts at BMI, a unit of Fitch, noted that potential U.S. sanctions on Venezuela and a possible Israeli strike on Iranian infrastructure could pose upside risks to oil prices.
“However, weakening global demand and rising output from both OPEC+ and non-OPEC producers will continue to exert downward pressure on prices in the quarters ahead,” they cautioned.
Saudi Arabia’s Strategy Shifts
Saudi Arabia, the world’s top crude exporter, cut its July oil prices for Asia to the lowest level in nearly two months. However, the reduction was smaller than anticipated, following OPEC+’s agreement to boost production by 411,000 barrels per day in July.
The move aligns with Riyadh’s broader strategy to regain market share and enforce production discipline among OPEC+ members, which include the Organization of the Petroleum Exporting Countries and allies like Russia.
