Oil prices rose in early trading on Monday after US and Chinese economic officials outlined a framework for a trade agreement between the two sides, easing concerns that tariffs and export restrictions between the world's two largest oil consumers could impact global economic growth.
Market movement
By 0027 GMT, Brent crude futures rose 46 cents, or 0.7 percent, to $66.40 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 46 cents, or 0.75 percent, to $61.96, after rising 8.9 percent and 7.7 percent, respectively, the previous week due to U.S. and European sanctions on Russia, according to Reuters data.
Haitong Securities said in a note that market expectations have improved following new sanctions on Russia and easing tensions between the United States and China, countering concerns about a crude supply glut that had driven prices lower earlier in October.
U.S. Treasury Secretary Scott Besant said Sunday that senior Chinese and U.S. economic officials reached a very substantial framework for a trade agreement in Kuala Lumpur, which will allow President Donald Trump and his Chinese counterpart, Xi Jinping, to discuss trade cooperation later this week.
Bessent said the framework would avoid 100 percent US tariffs on Chinese goods and postpone the implementation of China's export controls on rare earth minerals.
Trump also said on Sunday that he was optimistic about reaching an agreement with Beijing, and expected meetings to be held in China and the United States.
Tony Sycamore, a market analyst at IG, said the framework of the trade agreement helps offset concerns that Russia may be able to circumvent new US sanctions targeting Rosneft and Lukoil by offering deeper price discounts and using shadow fleets to attract buyers.
However, if sanctions on the Russian energy sector prove less effective than expected, oversupply pressures could return to the market, said Yang An, an analyst at Haitong Securities.
