The Organization of the Petroleum Exporting Countries has kept its relatively high global oil demand growth forecasts unchanged for this year and next
[NEW YORK] Oil prices rose on Monday (Oct 13) after assurances that US President Donald Trump will meet his Chinese counterpart Xi Jinping later in October, easing a flare-up in trade tensions between the world’s top two economies that had pushed crude benchmarks to five-month lows on Friday.
Brent crude futures settled 59 US cents higher, or 0.9 per cent, at US$63.32 a barrel, and US West Texas Intermediate crude futures also closed up 59 US cents, or 1 per cent, at US$59.49 a barrel.
Both contracts fell around 4 per cent on Friday to settle at their lowest since May, after Trump threatened to cancel the meeting with Xi and to impose steep new tariffs on imports from China.
However, US Treasury Scott Bessent said on Monday that the meeting between the US and Chinese leaders remains on track to be held in South Korea in late October, and noted substantial communications between the two sides over the weekend.
“We have substantially de-escalated,” Bessent said in an interview with Fox Business Network.
The sell-off in markets now looked to be capped by Washington and Beijing’s willingness to negotiate, DBS analyst Suvro Sarkar said, adding the near-term outlook hinged on the eventual outcome of the trade talks.
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Oil prices tumbled in March and April at the height of trade tensions between the two countries.
“Any reduction in international trade can only be bearish for oil,” PVM energy analysts said in a note to clients. On the demand side, China’s crude imports in September rose 3.9 per cent from a year earlier to 11.5 million barrels per day, customs data showed.
Meanwhile, the Organization of the Petroleum Exporting Countries (Opec) kept its relatively high global oil demand growth forecasts unchanged for this year and next.
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In a monthly report on Monday, Opec implied that the oil market will see a much smaller supply deficit in 2026 as the wider Opec+ group pushes ahead with output increases. Meanwhile, prospects of peace in the Middle East limited gains in oil prices. Palestinian militant group Hamas freed the last 20 surviving Israeli hostages on Monday under a US-brokered ceasefire deal.
Trump proclaimed the “historic dawn of a new Middle East” after two years of war in Gaza. Still, traders want to see the peace hold before factoring it into their bets on oil prices, PVM analysts noted.
“(Oil) market has been sceptical by voting with price as to any bullish influence on the recent outbreak of violence, it likewise too will wait for proof of a ceasefire that holds for more than just a couple of days,” the PVM analysts said. REUTERS
