Oil Extends Gain With US and Chinese Officials Set to Talk Trade

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Oil Extends Gain With US and Chinese Officials Set to Talk Trade.

energies :: 2025-05-07 :: source - bloomberg

By Alex Longley and Yongchang Chin

(Bloomberg) -- Oil pushed higher after rallying more than 3% in the previous session as the US and China agreed to start trade negotiations, raising optimism that tensions between the world’s two biggest economies may ease.

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Brent rose near $63 a barrel and West Texas Intermediate briefly topped $60. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with Chinese officials in Switzerland later this week, the first confirmed discussions since President Donald Trump imposed sweeping tariffs.

Oil has trended lower since late January due to escalating trade frictions and plans by OPEC+ to keep boosting idled supply, but prices have recovered from their lows in the last couple of days.

The decline in crude prices will likely lead to falling American shale output, according to Diamondback Energy Inc., the largest US independent oil producer in the Permian Basin. In another sign of the hit to output, the Energy Information Administration cut its forecast for US crude production this year for a second straight month.

Meanwhile, the industry-funded American Petroleum Institute reported US crude stockpiles shrank by 4.49 million barrels last week. Inventories also slipped at the Cushing, Oklahoma, oil storage hub. Government figures are due later on Wednesday.

“With some glimmers of hope now that US and China will start to talk trade, we see Brent crude lifting higher today,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. Prices gains were also helped by signs of falling US stockpiles and lower shale production, he added.