Oil prices have risen in response to anticipated talks between the presidents of the United States and China, aimed at easing trade tensions between the world’s two largest economies and oil consumers. Following a decline to five-month lows in the previous session, Brent crude futures increased by 92 cents, or 1.47%, to $63.65 a barrel. Similarly, US West Texas Intermediate crude rose by 89 cents, or 1.51%, to $59.79 a barrel, after experiencing a 4.24% loss on Friday.
The escalation of US-China trade tensions last week, prompted by China’s expansion of rare earth export controls, contributed to the decline in oil prices. In response, US President Donald Trump announced plans to impose 100% tariffs on China’s US-bound exports, as well as new export controls on critical software by November 1. However, Trump subsequently expressed optimism about the situation, stating that it would “all be fine.”
Despite the uncertainty surrounding the trade negotiations, a potential meeting between Trump and Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea may still take place later this month, according to US Trade Representative Jamison Greer. Analysts caution that there is still a risk of trade tensions escalating, which could lead to higher tariffs or more severe export restrictions.
China’s crude imports increased by 3.9% in September compared to the same period last year, reaching 11.5 million barrels per day, according to customs data. This growth is attributed to refineries operating at their highest utilization rates this year, as well as ongoing stockpiling efforts. The rise in oil prices is significant, as it reflects the market’s response to the anticipated trade talks and the potential impact on the global economy.
The upcoming meeting between the US and Chinese presidents is crucial, as it may help alleviate trade tensions and stabilize oil prices. The outcome of these talks will be closely watched by investors and analysts, as it has the potential to influence the global energy market and economy. As the situation continues to unfold, it is essential to monitor developments and assess their implications for the oil market and beyond.