Crude oil prices rose earlier today following reports that China is open to negotiating tariffs with the Trump administration. China’s commerce ministry said it is considering a U.S. proposal to discuss the trade dispute.
This slight chance of easing tensions boosted oil traders, pushing Brent crude to $62.53 per barrel and West Texas Intermediate (WTI) to $59.67 per barrel at the time of writing. However, both benchmarks are still on track to close the week lower, as concerns about tariffs continue to weigh on the market.
Adding to the downward pressure this week was Saudi Arabia’s indication that it is prepared to accept lower oil prices for an extended period. This move came after earlier reports that OPEC+ plans to increase production by 411,000 barrels per day in May, instead of the previously planned 138,000 barrels, which further pressured prices.
Despite Saudi Arabia’s strategy, potential tariff talks between Beijing and Washington could have a bigger impact. Vandana Hari of Vanda Insights told Reuters that if Washington pursues these talks, it could change the current negative market sentiment. She said, “No one expects smooth sailing, but this is an encouraging breakthrough in the deadlock hurting markets.”
OPEC+ is scheduled to meet on Monday to discuss production levels for June, and traders are anticipating possible surprises.
In a research note cited by Reuters, BMI analysts said that with rising non-OPEC+ supply and weakening global demand growth, OPEC+ will likely face continued price challenges regardless of when it adjusts its production cuts.
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