Oil prices rise ahead of US-China trade meeting
Kyiv • UNN
Oil prices edged up after a 3% rise amid signs of easing trade tensions between the US and China. The UK has announced a trade deal with the US.
Oil prices rose slightly on Friday after rising about 3% in the previous session, amid signs that trade tensions between the largest oil consumers, the US and China, showed signs of easing, and the UK announced a "breakthrough" trade agreement with the United States, UNN reports with reference to Reuters.
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Brent crude rose 23 cents, or 0.37%, to $63.07 a barrel, while US West Texas Intermediate crude rose 21 cents, or 0.35%, to $60.12 a barrel at 05:07 GMT (07:07 Kyiv time). Both contracts rose nearly 3% on Thursday.
On May 10, US Treasury Secretary Scott Bessent will meet with China's chief economic official, Vice Premier He Lifeng, in Switzerland to work on resolving trade disputes that threaten the growth of crude oil consumption.
"If both sides set a date for the start of formal trade talks and agree to lower their current high tariffs against each other while the talks continue, the markets will get a respite and oil could rise another $2-3 a barrel," said Vandana Hari, founder of analytical company Vanda Ins.
Chinese exports grew faster than expected in April, while imports narrowed their decline, customs data showed on Friday, bringing some relief to Beijing ahead of ice-breaking trade talks with the US this weekend.
Separately, US President Donald Trump and UK Prime Minister Keir Starmer announced that the UK had agreed to cut tariffs on imports from the US from 5.1% to 1.8%. The US has lowered tariffs on British cars but left 10% tariffs on most other goods.
"Any new US trade deals after the UK deal with other major trading partners would have only a minor impact on oil sentiment," Hari added.
Elsewhere, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) plan to increase production, which could put pressure on oil prices. A Reuters survey showed that OPEC oil production fell slightly in April as lower production in Libya, Venezuela and Iraq outweighed planned production increases.
Tougher US sanctions on Iran could limit supply and push prices higher. Sanctions against two small Chinese refineries for buying Iranian oil have made it difficult for them to obtain oil and forced them to sell their products under other names, sources said on Thursday.
Meanwhile, Pakistani armed forces launched "multiple attacks" along India's entire western border on Thursday evening and early Friday, the Indian army said, as the conflict between the nuclear-armed neighbors escalated.
Analysts at Rystad Energy expect both countries to increase oil purchases and refinery activity amid rising tensions.
"Demand for diesel is likely to increase amid rising military mobilization, while airline fuel consumption is declining as airspace closures lead to rerouting of flights, cancellations and sharp rises in airfares," said Rohan Goindi of Rystad in a note.
Rystad Energy estimates that in terms of daily oil demand, India consumes 5.4 million barrels per day compared to 0.25 million barrels per day in Pakistan.
