LONDON: Oil prices rose on Monday after hitting five-month lows in the previous session, as investors focused on potential talks between the presidents of the United States and China that could ease trade tensions between the world’s two largest economies.
Brent crude futures rose $1.08, or 1.7%, to $63.81 a barrel by 1056 GMT. U.S. West Texas Intermediate crude was at $60.03 a barrel, up $1.13, or 1.92%. Both contracts lost around 4% on Friday to settle at their lowest since May.
Market sentiment was also boosted by Palestinian group Hamas freeing the last 20 surviving Israeli hostages on Monday under a U.S.-brokered ceasefire deal. That was seen as a big step towards ending two years of war in Gaza as U.S. President Donald Trump proclaimed the “historic dawn of a new Middle East”.
“Last week’s price meltdown was largely on the back of ceasefire in Gaza and return of U.S.-China trade volatility ahead of the November 10 trade truce deadline,” DBS energy analyst Suvro Sarkar said.
Trump tariff threat pushes oil to five-month low
The selloff in markets now looked to be capped by Washington and Beijing’s willingness to negotiate, he said, adding the near-term outlook hinged on the eventual outcome of the trade talks.
Trade tensions flared up last week after China expanded its rare earth export controls. In response, U.S. President Donald Trump on Friday said he would impose 100% tariffs on China’s U.S.-bound exports.
An expected meeting between Trump and Chinese President Xi Jinping later this month was in doubt after Trump said on Friday there was no reason to meet his counterpart. U.S. Trade Representative Jamison Greer said on Sunday that a meeting could still happen in South Korea on the sidelines of the Asia-Pacific Economic Cooperation forum.
Oil prices tumbled in March and April at the height of trade tensions between the two countries.
On the demand side, China’s crude imports in September rose 3.9% from a year earlier to 11.5 million barrels per day, customs data showed.
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