On Monday, May 12, global oil prices marked an increase amid positive news from the United States and China regarding progress in trade negotiations. Representatives from both countries expressed optimism about a possible resolution to the long-standing dispute, which triggered a rise in the price of black gold.
This is reported by Finway
The price of Brent crude oil rose by 43 cents, or 0.67%, to $64.34 per barrel. The cost of American WTI crude increased by 48 cents, or 0.79%, to $61.50 per barrel. Notably, on Friday, both oil indices gained over a dollar, and for the week, Brent and WTI rose by more than 4%. This marked the first weekly increase since mid-April.
Impact of the US-Britain Agreement
The reasons for the price increase included the signing of an agreement between the US and Britain, which raised hopes of avoiding economic blows from Washington’s tariff policy.
On Sunday, another round of negotiations between China and the US concluded, during which American officials announced the achievement of a “deal” to reduce the deficit. For its part, Beijing confirmed the achievement of an “important consensus.” However, the details of the negotiations have not yet been disclosed, and on Monday, the parties are expected to publish a joint statement.
Outlook and Limitations
The optimistic sentiment in the market situation is driven by progress in dialogue between the US and China, which could stimulate trade between these two economic giants and increase demand for oil. However, as Toshitaka Tazawa from Fujitomi Securities notes, “limited details and OPEC’s plans to increase production are restraining growth.”
It is worth noting that OPEC+ intends to ramp up production in May and June, which could bring more crude oil to the market. At the same time, according to a Reuters survey, production slightly decreased in April.
Additionally, news about negotiations between Iran and the US, which discussed the nuclear issue in Oman, is impacting the market. New rounds of dialogue are planned, but Tehran has no intention of halting uranium enrichment. If a nuclear agreement is reached, it could alleviate concerns about oil shortages in the global market and potentially lower raw material prices.