Oil prices have surged nearly 3% following renewed optimism surrounding upcoming trade negotiations between the United States and China. This rebound comes after a period of volatility driven by economic uncertainties and supply concerns.
Brent crude futurs settled up $1.72, or 2.8%, at $62.84 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.84, or 3.2%, to $59.91. The uptick is attributed to the anticipation of a meeting between U.S. Treasury Secretary Scott Bessent and China’s top economic official on May 10 in Switzerland, aimed at resolving ongoing trade disputes that have disrupted global economic stability and crude demand.
Analysts caution that while the immediate market response is positive, underlying concerns persist. The U.S. Federal Reserve’s decision to maintain interest rates, coupled with a stronger U.S. dollar, continues to exert pressure on oil demand. Additionally, rising U.S. gasoline inventories and expected increases in oil output from OPEC+ add to market apprehensions.
Despite these challenges, the oil market’s recent performance indicates a potential shift in investor sentiment. The upcoming trade talks are viewed as a critical juncture that could either bolster the current price recovery or lead to renewed volatility, depending on the outcomes achieved.
Union Jack Oil plc (LON:UJO) is an oil and gas company with a focus on onshore production, development, exploration and investment opportunities within the United Kingdom and the United States of America hydrocarbon sector.
