Oil prices rebound as investors eye possible U.S.-China talks

Oil prices climbed on Monday as investors grew optimistic that expected talks between U.S. President Donald Trump and Chinese President Xi Jinping could ease trade tensions between the world’s two biggest economies and major oil consumers.

The rebound follows sharp losses on Friday, when oil hit a five-month low. Brent crude futures rose by 92 cents, or 1.47%, to $63.65 per barrel as of 7:22 a.m. WAT, recovering from a 3.82% drop on Friday — its lowest level since May 7. Meanwhile, U.S. West Texas Intermediate (WTI) crude increased by 89 cents, or 1.51%, to $59.79 per barrel after a 4.24% loss in the previous session. WTI trading will settle on Tuesday due to a public holiday in parts of the U.S.

Tensions between Washington and Beijing escalated last week after China expanded its export controls on rare earth materials. In retaliation, President Trump announced plans to impose 100% tariffs on China’s exports to the U.S. and introduce new export restrictions on “any and all critical software” by November 1. However, Trump sought to calm fears on Sunday, posting on Truth Social: “Don’t worry about China, it will all be fine!”

The remarks come ahead of a potential meeting between Trump and Xi on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea later this month. U.S. Trade Representative Jamison Greer confirmed that discussions about such a meeting are still ongoing.

Analysts warn that despite the renewed optimism, the risk of a further escalation in trade tensions remains high, which could temporarily trigger higher tariffs or stricter export bans.

Oil prices previously plunged in March and April during the peak of the trade dispute between the two nations.

Meanwhile, China’s crude oil imports rose 3.9% year-on-year in September to 11.5 million barrels per day, according to customs data, as refineries operated at their highest capacity so far this year and continued stockpiling efforts.