Oil prices ticked up early on Thursday after falling nearly 2% in the previous session, with investors weighing a potential OPEC+ output increase against conflicting tariff signals from the White House and ongoing U.S.-Iran nuclear talks.
Brent crude futures rose 6 cents, or 0.09%, to $66.18 a barrel by 0038 GMT, while U.S. West Texas Intermediate crude gained 7 cents, or 0.11%, to $62.34 a barrel.
Prices fell 2% in the previous trading session after Reuters reported that several OPEC+ members will suggest the group accelerates oil output increases for a second month in June, citing three sources familiar with the OPEC+ talks.
There had previously been disputes among the members over compliance with production quotas.
Signs that the U.S. and China could be moving closer to trade talks gave prices some support. The Wall Street Journal reported that the White House would be willing to lower its tariffs on China to as low as 50% in order to open up negotiations.
U.S. Treasury Secretary Scott Bessent said on Wednesday that current tariffs – 145% on Chinese products and 125% on U.S. products – were not sustainable and would have to come down before trade talks between the two sides, but he did not put a number on it. However, White House Press Secretary Karoline Leavitt said in an interview with Fox News on Wednesday that there would be no unilateral reduction in tariffs on goods from China.
Rystad Energy analysts say a prolonged U.S.-China trade war could cut China’s oil demand growth in half this year to 90,000 barrels per day (bpd) from 180,000 bpd.
Trump is also mulling tariff exemptions on car part imports from China, the Financial Times reported on Wednesday.
Potentially putting downward pressure on oil prices, the U.S. and Iran will hold a third round of talks this weekend on a possible deal to reimpose restraints on Tehran’s uranium enrichment program. The market is watching the talks for any sign that a U.S.-Iran rapprochement could lead to the easing of sanctions on Iran oil and boost supply.
But the U.S. on Tuesday put fresh sanctions on Iran’s energy sector, which Iran’s foreign ministry spokesperson said showed a “lack of goodwill and seriousness” over dialogue with Tehran.
(Reporting by Colleen Howe; Editing by Sonali Paul)