Oil prices jumped nearly 3% on Tuesday after the U.S. and China agreed to a 90-day halt on new tariffs, easing trade tensions and lifting hopes for stronger global economic growth.
Brent crude rose by $1.83, or 2.82%, to $66.79 in afternoon trading. U.S. West Texas Intermediate (WTI) gained $1.90, or 3.07%, to reach $63.85. The gains mark a sharp turnaround from recent declines, which were driven by oversupply concerns and weak market sentiment.
The pause in tariffs allows room for further negotiation. However, analysts caution that key disagreements, including U.S. concerns over Chinese industrial overcapacity and fentanyl regulation, are still unresolved.
Even so, the temporary trade truce boosted market optimism after weeks of slow activity. Traders are also watching refining constraints in the U.S. and Europe, which are helping to support fuel prices.
Despite a recent increase in OPEC+ output by 411,000 barrels per day in May, strong demand—especially for gasoline and jet fuel this summer—is expected to keep prices firm.
Geopolitical tensions and seasonal refinery maintenance are adding to market uncertainty, with some analysts predicting prices could retest April highs. Still, if U.S.-China talks break down or supply continues to outpace refining, the rally may be short-lived.
For now, the market is riding a wave of optimism, with crude climbing on renewed hope.
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