Oil prices rose in early trading on Monday, supported by easing trade tensions between the United States and China — the world’s two largest oil consumers — and renewed optimism about global economic stability.
Brent crude gained 46 cents (0.7%) to trade at $66.40 per barrel by 00:27 GMT, while U.S. West Texas Intermediate (WTI) rose 46 cents (0.75%) to $61.96.
Both benchmarks rallied strongly last week — up 8.9% and 7.7%, respectively — following new U.S. and EU sanctions on Russia.
Analysts at Haitong Securities said that the market’s sentiment has improved thanks to the combination of fresh sanctions on Russian energy and the thaw in U.S.-China trade relations. These developments have helped counter earlier fears of oversupply that pushed prices down earlier in October.
💬 Trade Framework Boosts Confidence
U.S. Treasury Secretary Scott Bessent confirmed that top American and Chinese economic officials have agreed on a “very substantial framework” for a trade deal during talks in Kuala Lumpur.
The framework aims to:
- Prevent 100% U.S. tariffs on Chinese goods.
- Secure a deferral of China’s rare-earth export controls.
- Lay the groundwork for meetings between President Donald Trump and President Xi Jinping later this week.
Bessent said the agreement would “pave the way for productive dialogue” and reduce uncertainty weighing on global markets.
President Trump echoed that optimism, telling reporters:
“I think we’re going to have a deal with China. We’re going to meet them later in China and then again in the U.S., either Washington or Mar-a-Lago.”
⚖️ Sanctions and Supply Dynamics
The trade optimism has helped offset market concerns over Russia’s ability to counter new U.S. sanctions targeting major energy firms Rosneft and Lukoil.
Tony Sycamore, a market analyst at IG, said Russia could respond by offering deeper crude discounts and relying on shadow fleets to maintain exports.
However, analysts warn that if sanctions prove less effective than expected, global supply pressures could reemerge, limiting the current price rally.
Yang An of Haitong Securities noted:
“If sanctions on Russian energy are less effective than anticipated, oversupply pressures could return to the market.”
📊 Outlook
With oil prices rebounding from early October lows and global trade tensions easing, traders are cautiously optimistic.
Still, analysts say the balance between sanctions, trade progress, and actual supply levels will determine whether this rebound is sustainable or short-lived in the weeks ahead.
