Oil steadies as traders seek details from US-China trade talks

Oil steadied as traders waited for details on US-China trade talks, after both countries reported “substantial progress” following two days of negotiations aimed at de-escalating a trade war that threatens crude demand.

Brent traded around $64 a barrel, paring an advance in early Asian trading after last week notching up its first weekly gain in three, while West Texas Intermediate was near $61.

Trade talks progress

After negotiations in Geneva, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer said that they were upbeat on progress and would share more information on Monday, with the positive sentiment echoed by their Chinese counterparts.

Crude has recouped some ground after plunging at the start of last month on concerns President Donald Trump’s trade war will dent economic growth, even as OPEC+ boosts production.

Futures are still down more than a fifth from a mid-January peak as the prospect of lower demand and higher supply increases the likelihood of a glut later in the year.  

“Whether the tariff issue can be fundamentally resolved and to what extent tensions will ease remains to be verified,” said Gao Jian, an analyst at Qisheng Futures Co. “Unless the oil market sees more real, favorable developments on the fronts of macro, fundamentals or geopolitics, upside for further rebound is limited.” 

Geopolitical tensions

The US and Iran will continue talks over the Islamic Republic’s nuclear program, after discussions on Sunday that were described as encouraging by Washington and “difficult but useful” by Tehran. The US last week sanctioned a third oil refinery in China it accused of facilitating the Iranian oil trade. 

Meanwhile, efforts to secure peace in Ukraine are reaching a decisive moment with Ukraine’s Volodymyr Zelenskiy challenging Vladimir Putin to engage in talks this week. 

Market metrics are mixed. The difference between Brent’s two nearest contracts is in solid backwardation, a bullish structure where near-term prices are higher than those further out, while contracts further down the curve display the opposite contango pattern.