NEW YORK: Oil prices settled nearly 2% higher on Friday and notched their first weekly gains since mid-April as a US trade deal with the United Kingdom turned investors optimistic ahead of talks between top officials from Washington and Beijing.
Brent crude futures rose $1.07, or 1.7%, to settle at $63.91 a barrel, while US West Texas Intermediate crude futures advanced $1.11, or about 1.9%, to settle at $61.02. Week-over-week, both benchmarks gained over 4%. US President Donald Trump on Friday said China should open its market to the US, and that an 80% tariff on Chinese goods “seems right,” a day after he announced a deal lowering tariffs on British car and steel exports, among other agreements with the United Kingdom.
“Energy markets - as bearish as they’ve been - are finally shaking off some of the pessimism and catching the broader market optimism that’s showing back up as progress on trade relationships has begun,” said Alex Hodes, oil analyst at brokerage StoneX.
The UK agreement and Trump’s comments on China have raised hopes for similar deals between Washington and Beijing. US Treasury Secretary Scott Bessent was to meet with China’s top economic official Vice Premier He Lifeng in Switzerland on May 10. Current US tariffs on Chinese imports stand at 145%.
“While prohibitively high, you can’t knock the math ... 80% is substantially less than 145%,” Hodes wrote to clients. Chinese exports rose faster than expected in April while imports narrowed their decline, customs data showed on Friday, giving Beijing some relief ahead of the talks.
Rising hostilities in the Middle East also boosted oil prices this week, Nikos Tzabouras, senior market analyst at trading platform Tradu, said. Israel’s military said it had intercepted a missile launched from Yemen towards its territory, days after Oman mediated a ceasefire between the US and Yemen’s Houthis, who claimed responsibility for Friday’s attack.
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