Oil prices rose in early trade on Monday after U.S. and Chinese economic officials sketched out a trade-deal framework, easing fears that tariffs and export curbs between the world’s top two oil consumers could dent global economic growth.
Brent crude futures rose 46 cents, or 0.7%, to $66.40 a barrel by 0027 GMT. U.S. West Texas Intermediate crude futures rose 46 cents, or 0.75%, to $61.96, after rising 8.9% and 7.7%, respectively, in the previous week on U.S. and EU sanctions on Russia.
Haitong Securities said in a note that market expectations have improved following new sanctions on Russia and the easing of U.S.-China tensions, countering concerns about crude oversupply that had driven prices down earlier in October.
U.S. Treasury Secretary Scott Bessent said on Sunday top Chinese and U.S. economic officials hashed out a “very substantial framework” for a trade deal in Kuala Lumpur, which would allow President Donald Trump and President Xi Jinping to discuss trade cooperation later this week.
Bessent said the framework would avoid 100% U.S. tariffs on Chinese goods and achieve a deferral of China’s rare-earth export controls.
Trump also said on Sunday he was optimistic about reaching an agreement with Beijing and expected to hold meetings in China and the United States.
“I think we’re going to have a deal with China,” Trump said. “We’re going to meet them later in China and we’re going to meet them in the U.S., either Washington or Mar-a-Lago.”
The positive trade-deal framework helps offset concerns that Russia could offset new U.S. sanctions, targeting Rosneft and Lukoil, by offering deeper discounts and using shadow fleets to lure buyers, said Tony Sycamore, a market analyst at IG.
“However, if sanctions on Russian energy are less effective than expected, oversupply pressures could return to the market,” said Yang An, an analyst at Haitong Securities.
(Reporting by Sam Li and Lewis Jackson; Editing by Sonali Paul)