Oil prices are poised for their first weekly gain in three weeks, buoyed by renewed U.S.-China trade talks, which have raised hopes for global economic growth and increased oil demand. As of Friday, Brent crude dropped 0.3% to $65.15 per barrel, and U.S. West Texas Intermediate (WTI) crude also slipped 0.3% to $63.17. However, for the week, Brent is up 2.1% and WTI 4%. The trade discussions resumed at Washington’s request, with both U.S. President Donald Trump and Chinese President Xi Jinping reporting positive outcomes, fueling market optimism.
Other factors influencing the oil market include ongoing U.S. sanctions on Venezuela and potential Israeli strikes on Iranian infrastructure, adding upward pressure on prices. Conversely, signs of weaker demand and increased oil output from OPEC+ and non-OPEC producers are expected to temper price gains in coming quarters. Saudi Arabia, the top exporter, reduced its July crude prices for Asia slightly, following the OPEC+ agreement to raise output by 411,000 barrels per day. The kingdom had sought a larger production hike to regain market share and enforce discipline among OPEC+ members. Canada also continued its trade discussions with the U.S. to address broader economic impacts.
The interplay of geopolitical tensions, trade negotiations, and supply dynamics continues to shape the oil market's trajectory. Investors and analysts will closely monitor these developments to assess future price movements and market stability.