Oil Prices Rise as U.S.-China Trade Optimism Lifts Market Sentiment

Oil prices advanced in early trade on Monday after U.S. and Chinese economic officials outlined a framework for a potential trade deal, easing concerns that escalating tariffs between the world’s top two oil consumers could slow global growth.

Brent crude futures climbed 46 cents, or 0.7%, to $66.40 a barrel by 0027 GMT, while U.S. West Texas Intermediate (WTI) rose 46 cents, or 0.75%, to $61.96. Both benchmarks rallied sharply last week — Brent up 8.9% and WTI up 7.7% — supported by fresh U.S. and EU sanctions on Russian energy companies.

Analysts at Haitong Securities said sentiment has improved as easing trade tensions and sanctions on Russia offset earlier fears of oversupply that had pressured prices in October.

U.S. Treasury Secretary Scott Bessent said top economic officials from both countries agreed on a “very substantial framework” for a trade deal in Kuala Lumpur, paving the way for discussions between President Donald Trump and President Xi Jinping later this week. The plan would reportedly avert 100% U.S. tariffs on Chinese goods and defer China’s rare-earth export controls.

Trump expressed optimism on Sunday, saying he expects to meet Chinese officials both in Beijing and later at Mar-a-Lago.

“The positive trade-deal framework helps offset concerns that Russia could blunt the impact of new sanctions by offering discounts and using shadow fleets to attract buyers,” said Tony Sycamore, market analyst at IG.

“However, if sanctions on Russian energy prove less effective than expected, oversupply risks could re-emerge,” added Yang An of Haitong Securities.