SINGAPORE: Oil prices rose on Tuesday as early signs of a thaw in U.S.-China trade tensions bolstered market sentiment, alleviating concerns over global fuel demand.
U.S. President Donald Trump remains committed to meeting Chinese President Xi Jinping in South Korea this month, Treasury Secretary Scott Bessent said on Monday, as both countries try to defuse tension over tariff threats and export controls.
There were substantial communications between the two sides over the weekend and more meetings were expected, he added.
Brent crude futures rose 22 cents, or 0.4%, to $63.54 a barrel by 0405 GMT, while U.S. West Texas Intermediate crude was at $59.71 a barrel, up 22 cents, or 0.4%.
In the previous session, Brent settled 0.9% higher, and U.S. WTI closed up 1%.
“Oil steadied as investors weighed U.S.–China tensions against demand,” Saxo Bank analysts said in a note, adding that Trump had softened his tone and signalled openness to a deal.
The prospect of improved trade ties between the world’s two largest economies has historically buoyed oil markets, as investors anticipate stronger global growth and increased fuel demand.
However, recent developments, such as Beijing’s expanded export controls on rare earths and Trump’s threats of 100% tariffs and software export curbs from November 1, have weighed on sentiment.
Last week, oil prices posted weekly losses and touched their lowest levels since May.
Trump had also cast doubt on prospects for a meeting with Xi during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea set for October 30 and November 1, saying on Truth Social, “Now there seems to be no reason to do so.”
While the selloff in markets seems to be limited by the more conciliatory tone between Washington and Beijing, their relations are expected to stay in the spotlight.
“The oil industry continues to navigate geopolitical issues,” said ANZ analyst Daniel Hynes.
“China announced that it would levy U.S.-owned ships arriving at its shores, including oil tankers. That sparked several last-minute cancellations and a jump in shipping rates.”
Limiting the market’s upside, Trump declared the end on Monday of the two-year-long Gaza war that has disrupted the wider Middle East.
In its monthly report on Monday, the Organization of the Petroleum Exporting Countries, and allies including Russia, said the oil market’s supply shortfall would shrink in 2026, as the wider OPEC+ alliance proceeds with planned output increases.
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