Oil prices rose on Monday after US and Chinese economic officials drafted a framework for a trade deal. This eased concerns that tariffs and export restrictions between the world’s two largest oil consumers could negatively impact global economic growth.
Brent crude futures rose 47 cents, or 0.71%, to $66.41 a barrel by 06:29 GMT. WTI rose 44 cents, or 0.72%, to $61.94 a barrel after rising 8.9% and 7.7%, respectively, the previous week due to US and EU sanctions against Russia.
The market, which had been strained by the new sanctions imposed on Russia, recovered after US-China tensions eased, and concerns about crude oversupply, which had driven prices down in early October, eased.
US and Chinese officials said they had agreed on a “very comprehensive framework for a trade agreement” that would allow Trump and Chinese President Xi Jinping to discuss trade cooperation this week.
The framework would reportedly eliminate 100% of US tariffs on Chinese goods and provide for the postponement of China’s rare earth export controls.
Trump also said he was optimistic about reaching a deal with Beijing on Sunday and expected to hold talks in China and the United States.
The framework for the trade agreement was said to help alleviate concerns that Russia could offset new US sanctions targeting Rosneft and Lukoil by offering steeper discounts and using shadow fleets to attract buyers.
However, if sanctions on Russian energy prove less effective than expected, oversupply pressures could return to the market.