Crude oil appreciated on Thursday following news that the US and China agreed to hold more trade talks, as announced during a phone call between US President Donald Trump and Chinese leader Xi Jinping.
Brent crude futures gained 48 cents or 0.7 per cent to trade at $65.34 a barrel and the US West Texas Intermediate (WTI) crude improved by 52 cents or 0.8 per cent to finish at $63.37 a barrel.
President Trump and Chinese leader Xi spoke on phone yesterday and plan to hold trade talks soon
According to reports, the discussions between the leaders of the two world’s largest economies were held at President Trump’s request.
The US president wrote in a post on Truth Social that the call lasted one and half hours, and focused exclusively on trade. He added that a US delegation led by Treasury Secretary Scott Bessent would meet with a Chinese team for negotiations “shortly,” and that both leaders extended invitations to visit each other’s countries.
The talks come amid persistent tension between the world’s two largest economies, and after Trump posted Wednesday that the Chinese leader was extremely hard to make a deal with.
The phone call is the first time that Mr Trump and Mr Xi are confirmed to have spoken since the US leader’s return to office in January. Since then, the pair had slapped huge tariffs on each other, before agreeing a truce last month.
Also, Canadian Prime Minister Mark Carney and President Trump are also in direct communication as part of Canada’s bid to persuade the US to lift tariffs.
Saudi Arabia, the world’s biggest oil exporter, cut its July prices for Asian crude buyers to nearly the lowest level in two months.
The Saudi price cut followed a move by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) last weekend to increase output by 411,000 barrels per day for July.
The strategy of Saudi Arabia, OPEC’s de facto leader, is partly to punish over-producers by potentially unwinding 2.2 million barrels per day of cuts between June and the end of October.
Wildfires in Canada that threaten to reduce oil production are providing price support with almost 7 per cent of Canada’s production affected.
This comes despite a potentially oversupplied market in the second half of the year with expected OPEC+ production hikes.