SINGAPORE: Oil prices edged up on Tuesday, supported by signs that tensions between the United States and China may be easing, lifting market sentiment after weeks of uncertainty about global fuel demand.
According to reports, US Treasury Secretary Scott Bessent said President Donald Trump remains committed to meeting Chinese President Xi Jinping in South Korea later this month. The planned meeting is seen as a step toward easing the trade dispute that has led to repeated tariff threats and export restrictions.
Bessent noted that both sides held substantial talks over the weekend, with more discussions expected in the coming days. His comments helped calm markets that had been rattled by escalating rhetoric between the world’s two largest economies.
By 0000 GMT, Brent crude futures were up 18 cents, or 0.28 percent, to $63.50 a barrel, while US West Texas Intermediate (WTI) crude gained 16 cents, or 0.27 percent, to trade at $59.65. On Monday, Brent closed 0.9 percent higher and WTI rose 1 percent.
Market buoyed by trade optimism
The possibility of renewed dialogue between Washington and Beijing has historically given oil markets a boost, as traders anticipate stronger global growth and higher fuel consumption when trade barriers ease. However, recent developments have kept investors cautious.
China’s move to expand export controls on rare earths and Trump’s renewed threats to impose 100 percent tariffs and software export bans from November 1 had weighed heavily on market sentiment last week. These factors drove oil prices to their lowest levels since May, marking weekly losses.
Adding to the uncertainty, Trump had earlier cast doubt on meeting Xi at the upcoming Asia-Pacific Economic Cooperation (APEC) summit in South Korea, saying on Truth Social that “now there seems to be no reason to do so.”
Still, analysts say the recent shift in tone from both sides has helped limit further market losses. “The oil industry continues to navigate geopolitical issues,” Daniel Hynes, an analyst at ANZ, said in a note. “China announced that it would levy US-owned ships arriving at its shores, including oil tankers. That sparked several last-minute cancellations and a jump in shipping rates,” he added.
OPEC+ outlook weighs on gains
Capping oil’s upside, Trump announced the end of the two-year Gaza war on Monday, which had previously added geopolitical risk to oil prices.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, said in their monthly report that the global oil supply gap is expected to narrow in 2026 as the wider OPEC+ alliance proceeds with planned output increases.
Despite the slight rebound in prices, traders believe oil markets will remain volatile, with geopolitical tensions, production plans, and the outcome of US-China talks all expected to shape sentiment in the coming weeks.