Oil Keeps Climbing After Hitting Multi‐Week Highs As US‐China Trade Talks Spark Demand Hopes

Oil prices edged higher on Tuesday as investors remained bullish about a favorable outcome of U.S.-China talks, which will continue for a second day.

Brent crude futures rose 0.3% at $67.22 per barrel, while West Texas Intermediate crude futures were up 0.2% at $65.43 per barrel, as of 1.04 am ET.

The gains followed an upward price movement on Monday, when Brent prices closed at their highest since April.

U.S. Commerce Secretary Howard Lutnick called Monday's talks“fruitful” as the two sides sat down for the first time since meeting in Geneva. The U.S. and China want to settle several disputes, including Beijing's curbs on rare earth magnet exports and the White House's restrictions on Huawei's advanced chips.

Reuters reported, citing Goldman Sachs analysts, that oil prices have rebounded as concerns about demand have eased with the trade talks between Washington and Beijing and a favourable U.S. jobs report. Canadian wildfires also pose a risk to supplies in North America.

Oil prices have been pressured this year as Trump's Liberation Day tariff threats raised fears of a global economic cooldown. Investors are also concerned about oversupply, as OPEC+ is gradually restoring curtailed production.

However, Morgan Stanley analysts noted on Monday that production in Saudi Arabia has not ramped up significantly yet.

Separately, Iran was evaluating a counter-proposal to an offer made by the Trump administration about a potential nuclear deal. Iran, among the top three producers in the OPEC+ producer group, viewed the U.S. proposal as unacceptable.

A nuclear deal will pave the way for the lifting of sanctions, enabling Tehran to export more oil.

The United States Oil Fund (USO) is down 6.2% this year while the Energy Select Sector SPDR Fund (XLE) has fallen 3.2%.

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