Global oil prices are showing a decline despite US President Donald Trump’s statements about the intention to reduce tariffs on Chinese goods following talks with Xi Jinping in South Korea. Market players remain cautious about the prospects of ending the trade war, which is reflected in the dynamics of quotations.
This is reported by Finway
Dynamics of Brent and WTI Oil Futures
On Thursday, Brent oil futures, which had risen by 52 cents the day before, lost 20 cents, or 0.31%, reaching $64.72 per barrel as of 06:42 GMT. American WTI also fell by 20 cents, or 0.33%, trading at $60.28 after an increase of 33 cents the previous day.
Impact of US-China Trade Negotiations
Donald Trump agreed to reduce tariffs on Chinese goods from 57% to 47% as part of an annual agreement. In response, China promised to resume purchases of American soybeans, ensure uninterrupted exports of rare earth metals, and intensify the fight against the illegal trade of fentanyl. However, market participants do not view these steps as a definitive resolution of the trade conflict.
“Now the market sees everything as it is, without the political backdrop,” said Vandana Hari, founder of Vanda Insights. “This is nothing more than a pause in the standoff and a slight de-escalation that was presented as a ‘trade deal.'”
The decision by the US Federal Reserve to lower the base rate, which met investors’ expectations, also had an additional impact on the market. However, as noted by the Fed, this may be the last reduction until 2025 due to risks associated with a government shutdown and limited access to economic data.
Claudio Galimberti, chief economist at Rystad Energy, believes that the Fed’s recent decision indicates a shift in policy towards supporting the economy rather than restraining it, which positively affects commodities sensitive to economic activity.
Previously, Brent and WTI also showed an increase amid a larger-than-expected reduction in oil and petroleum product inventories in the US. At the same time, both benchmark oil grades are heading for a decline of more than 3% in October, marking their third consecutive monthly loss.