Oil prices rise after signs of a US-China trade deal

Global oil markets saw a significant rise in prices on Monday, following progress in trade negotiations between the United States and China. The two sides reached a framework for a joint trade agreement, alleviating concerns about the impact of the trade war on global economic growth.

Details of the Rise

The price of a barrel of US crude oil rose to $61.90, continuing its gains for the second consecutive week, supported by two main factors:

- Progress in trade negotiations between the world's two largest economies.

- US and European sanctions imposed on Russia.

Trade Framework

US Treasury Secretary Scott Besant said on Sunday that officials from both countries discussed a very substantive framework for a trade deal, which would enable Presidents Donald Trump and Xi Jinping to discuss trade cooperation this week.

This framework is expected to include:

- Avoiding 100% US tariffs on Chinese goods

- Postponing export controls on rare earth metals

Official optimism from President Trump

President Trump expressed optimism about reaching an agreement with Beijing, anticipating a series of meetings in both countries. He said, "I think we'll reach a deal with China, and we'll meet with them later in China, and we'll meet with them in the United States."

Market Outlook

Oil prices are expected to continue rising in the short and medium term, supported by:

- Improving trade relations between the two economic giants

- Western sanctions on Russia

Any corrective pullback now will be a good area to re-establish buying positions again.

However, analysts warn that oversupply pressures could return to the market if sanctions on the Russian energy sector are less effective than expected, which could lead to a further decline in prices.

It's worth noting that prices had fallen earlier in October due to oversupply concerns, but the current positive environment has restored confidence to the markets.

Weekly energy analysis here
Crude oil analysis