Oil Prices Edge Higher as US-China Trade Tensions Ease

Oil Prices Edge Higher as US-China Trade Tensions Ease

Oil prices rose slightly on Tuesday as easing trade tensions between the United States and China lifted market sentiment, though weak demand projections capped further gains.

Brent crude was trading at $61.06 per barrel, up 0.4% from the previous close of $60.80. US benchmark West Texas Intermediate (WTI) also rose 0.5% to $57.18, compared to $56.92 in the prior session.

Market sentiment improved after both countries signaled that the tone of their trade negotiations could soften ahead of a planned meeting in South Korea.

US President Donald Trump said Monday that he expects to reach a “very fair” and “very strong trade deal” with Chinese President Xi Jinping during their planned talks in South Korea.

Despite the improved sentiment, the rise in prices was capped by a bearish global demand outlook outlined in the International Energy Agency’s (IEA) Oil Market Report released last week.

The IEA revised its 2025 global oil demand growth forecast down by 35,000 barrels per day (bpd). Demand is now expected to increase by 710,000 bpd year-on-year to reach 103.84 million bpd, compared with a previous forecast of 740,000 bpd growth.

For 2026, demand is projected to rise by a smaller margin of 700,000 bpd to reach 104.54 million bpd, reflecting slowing consumption in advanced economies.

Analysts noted that any sustained gains would depend on progress in US-China trade talks and signs of a stronger demand recovery in Asia.