Oil prices climb over 1% on hopes of U.S.-China trade breakthrough

Oil prices rose more than 1% on Thursday, fueled by growing optimism surrounding upcoming trade discussions between the United States and China — the world's two biggest oil consumers.

Brent crude futures gained 86 cents, or 1.4%, reaching $61.98 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 97 cents, or around 1.7%, to $59.03 a barrel by 1120 GMT.

According to SEB analyst Ole Hvalbye, the market appears to have stabilized just above $61 per barrel. He noted that hopes for progress in U.S.-China relations, with preliminary talks expected soon, are adding to the positive sentiment.

U.S. Treasury Secretary Scott Bessent is set to meet with China’s top economic policymaker on May 10 in Switzerland for negotiations aimed at easing tensions in an ongoing trade dispute that has cast a shadow over the global economy.

As the world's largest economies, any resolution between the U.S. and China could impact global oil demand, which has been under pressure amid slowing consumption growth linked to the trade conflict.

Fawad Razaqzada, an analyst at City Index and Forex.com, added that other recent trade announcements — including a new deal between the U.S. and the UK — may also provide mild support to oil markets.

However, price gains are being weighed down by expectations of increased output from OPEC and its allies, which could cap the upward momentum.

Citi Research analysts have revised their short-term Brent crude price forecast down to $55 per barrel from $60, though they continue to project an average of $60 per barrel for the year. They also warned that the outcome of U.S.-Iran nuclear negotiations could significantly influence prices — potentially driving Brent down toward $50 if a deal leads to higher Iranian oil supply, or pushing it above $70 if talks fail.