Optimism over talks between the world’s two largest oil consumers buoys prices
08 May 2025 - 07:36
UPDATED 08 May 2025 - 21:44
byStephanie Kelly and Seher Dareen
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New York — Oil prices rose about 3% on Thursday, buoyed by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.
Brent crude futures settled up $1.72, or 2.8%, at $62.84 a barrel. US West Texas Intermediate crude rose $1.84, or 3.2%, to $59.91.
US treasury Secretary Scott Bessent will meet China’s top economic official on May 10 in Switzerland for negotiations on a trade war that is disrupting the global economy.
Optimism over those talks was providing support to the market, said SEB analyst Ole Hvalbye.
The countries are the world’s two largest economies and fallout from their trade dispute was likely to lower crude consumption growth.
Analysts cautioned that the recent tariff-driven volatility in the oil market was not over.
“The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium that will also be fluctuating in response to the latest headlines out of the Trump administration,” Jim Ritterbusch, of US energy consultancy Ritterbusch and Associates, said in a note.
In another trade development, US President Donald Trump and British Prime Minister Keir Starmer announced a “breakthrough deal” on trade that leaves in place a 10% tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods.
On the supply front, Opec+ will increase oil output, putting pressure on prices.
Opec oil output edged lower in April despite a scheduled output hike taking effect, a Reuters survey found, led by a cut in Venezuelan supply on renewed US attempts to curb the flows and smaller drops in Iraq and Libya.
Analysts at Citi Research lowered their three-month price forecast for Brent to $55 per barrel from $60, but maintained their long-term forecast of $60 a barrel this year.
A US-Iran nuclear deal could drive Brent prices down towards $50 per barrel on increased global supply, but without a deal prices could rise to over $70, they added.
US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington’s stepped-up pressure is inflicting on Tehran's biggest oil buyer.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices rise 3% on US-China talks
Optimism over talks between the world’s two largest oil consumers buoys prices
New York — Oil prices rose about 3% on Thursday, buoyed by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.
Brent crude futures settled up $1.72, or 2.8%, at $62.84 a barrel. US West Texas Intermediate crude rose $1.84, or 3.2%, to $59.91.
US treasury Secretary Scott Bessent will meet China’s top economic official on May 10 in Switzerland for negotiations on a trade war that is disrupting the global economy.
Optimism over those talks was providing support to the market, said SEB analyst Ole Hvalbye.
The countries are the world’s two largest economies and fallout from their trade dispute was likely to lower crude consumption growth.
Analysts cautioned that the recent tariff-driven volatility in the oil market was not over.
“The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium that will also be fluctuating in response to the latest headlines out of the Trump administration,” Jim Ritterbusch, of US energy consultancy Ritterbusch and Associates, said in a note.
In another trade development, US President Donald Trump and British Prime Minister Keir Starmer announced a “breakthrough deal” on trade that leaves in place a 10% tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods.
On the supply front, Opec+ will increase oil output, putting pressure on prices.
Opec oil output edged lower in April despite a scheduled output hike taking effect, a Reuters survey found, led by a cut in Venezuelan supply on renewed US attempts to curb the flows and smaller drops in Iraq and Libya.
Analysts at Citi Research lowered their three-month price forecast for Brent to $55 per barrel from $60, but maintained their long-term forecast of $60 a barrel this year.
A US-Iran nuclear deal could drive Brent prices down towards $50 per barrel on increased global supply, but without a deal prices could rise to over $70, they added.
US sanctions on two small Chinese refiners for buying Iranian oil have created difficulties receiving crude and led them to sell product under other names, sources familiar with the matter said, evidence of the disruption that Washington’s stepped-up pressure is inflicting on Tehran's biggest oil buyer.
Reuters
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MARKET HIGHLIGHT: Ticking higher
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