West Texas Intermediate (WTI) crude oil prices edged lower during Friday’s Asian trading hours, hovering around $59.80 per barrel after a nearly 4% surge in the previous session. The rally was fueled by easing trade tensions between the United States (US) and China, along with the announcement of a “breakthrough” trade deal between the US and the United Kingdom (UK).
US-China Trade Talks and UK Deal Support Oil Prices
US Treasury Secretary Scott Bessent is scheduled to meet with China’s Vice Premier He Lifeng in Switzerland on May 10, aiming to address the ongoing trade disputes that have dampened global crude oil demand. Additionally, US President Donald Trump and UK Prime Minister Keir Starmer announced a trade deal that includes a reduction in UK tariffs on US imports from 5.1% to 1.8%, while the US has lowered tariffs on British automobiles and maintained a 10% duty on most other goods.
OPEC+ and US Sanctions Pose Risks to Oil Prices
Despite the recent rally, WTI prices face considerable headwinds. OPEC and its allies (OPEC+) are preparing to increase oil production, which may put downward pressure on prices. A Reuters survey indicated that OPEC’s output saw a slight decline in April, as reduced production in Libya, Venezuela, and Iraq offset planned increases elsewhere.
Additionally, US sanctions on two smaller Chinese refiners accused of purchasing Iranian crude have disrupted their operations. Sources suggest these refiners are now selling products under different names, signaling an escalation in Washington’s campaign to curb Iran’s oil revenues and push for renewed nuclear negotiations.
