Oil Prices Rise As U.S.-China Talks Ease OPEC Supply Concerns
Oil prices rose on Tuesday as investors awaited the outcome of U.S.-China talks that could pave the way for easing trade tensions and boost fuel demand.
Brent crude futures rose 22 cents, or 0.3%, to $67.26 a barrel by 0645 GMT. U.S. West Texas Intermediate crude futures rose 18 cents, or 0.3%, to $65.47.
Brent crude futures rose to $67.19 on Monday, the highest since April 28, boosted by the prospect of a U.S.-China trade deal.
U.S.-China trade talks are set to continue for a second day in London as top officials aim to defuse tensions that have flared over tariffs and restrictions on rare earths, which have threatened to disrupt global supply chains and slow growth.
Prices have recovered as demand concerns have eased with trade talks between Washington and Beijing and a favourable US jobs report, while there are risks to North American supplies from wildfires in Canada, Goldman Sachs analysts said.
US President Donald Trump said on Monday that talks with China were going well and he had “nothing but good reports” from his team in London.
A trade deal between the US and China could support the global economic outlook and boost demand for commodities including oil.
Elsewhere, Iran said it would soon submit a counter-proposal to the nuclear deal to the US in response to a US offer that Tehran deemed “unacceptable”, while Trump made clear that the two sides were still at odds over whether the country should be allowed to continue enriching uranium on Iranian soil.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries and any easing of US sanctions on Iran would allow it to export more oil, weighing on global crude prices.
Meanwhile, a Reuters survey found that OPEC oil output rose in May, although the increase was limited as Iraq pumped below target to offset previous overproduction and Saudi Arabia and the United Arab Emirates made smaller increases than permitted.
OPEC+, which pumps about half the world’s oil and includes OPEC members and allies such as Russia, accelerated its plan to end its latest round of production cuts. “The prospect of further increases in OPEC supply continues to haunt the market,” Daniel Hynes, senior commodity strategist at ANZ, said in a note.
“A permanent shift to a market-driven strategy (in OPEC) would push the oil market into a sizeable surplus in H2 2025 and almost certainly lead to lower oil prices.”
Source: Investing.com
