Oil prices rose on Monday after both sides in U.S.-China trade talks over the weekend touted their progress, which lifted market sentiment that the world’s two largest crude users may be moving toward a resolution of their trade dispute.
Brent crude futures climbed 27 cents, or 0.4%, to $64.18 a barrel at 0001 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading at $61.30 a barrel, up 28 cents, or 0.5%, from Friday’s close.
Both benchmarks increased more than $1 on Friday and gained over 4% last week, notching their first weekly gains since mid-April, after a U.S. trade deal with the United Kingdom made investors optimistic that economic dislocations from U.S. tariffs on its trading partners may be avoided.
The U.S. and China ended trade talks on a positive note on Sunday, with U.S. officials touting a “deal” to reduce the U.S. trade deficit, while Chinese officials said the sides had reached “important consensus”.
However, neither side released any details of the talks with Chinese Vice Premier He Lifeng saying a joint statement would be released on Monday.
Positive talks between the world’s two largest economies could help boost crude demand as trade, currently disrupted by massive tariffs from both countries, is restored between them.
“Optimism over constructive U.S.-China talks supported sentiment, but limited details and OPEC’s plan to raise output capped gains,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Tazawa was referring to plans by the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, to accelerate output hikes in May and June that will add more crude to the market.
However, a Reuters survey found that OPEC oil output edged lower in April.
Additionally, talks between Iranian and U.S. negotiators to resolve disputes over Tehran’s nuclear programme ended in Oman on Sunday with further negotiations planned, officials said, as Tehran publicly insisted on continuing its uranium enrichment.
A U.S.-Iran nuclear deal could alleviate concerns about lower global oil supply, which could also pressure oil prices.
U.S. energy firms last week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said on Friday.
(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)