Indicators of easing between Washington and Beijing drive oil prices stability
Oil prices stabilized today, Tuesday, supported by preliminary indicators of a decrease in the severity of trade tensions between the United States and China, which boosted optimism in the markets and alleviated concerns related to global fuel demand.
In this context, U.S. Treasury Secretary Scott Pisonet said yesterday, Monday, that "President Donald Trump remains committed to meeting with his Chinese counterpart Xi Jinping in South Korea later this month," noting that the meeting comes as part of joint efforts to contain the tensions resulting from mutual threats to increase tariffs and impose export restrictions.
Pisonet added that "intensive communications took place between the two sides earlier this week," expecting "more meetings to be held soon."
Regarding prices, Brent crude futures stabilized at $63.34 per barrel, while West Texas Intermediate crude recorded $59.51 per barrel, with little change.
The improvement in trade relations between the world's two largest economies is seen as a supportive factor for oil prices, as investors are counting on a recovery in economic growth and an increase in energy demand.
However, market sentiment remains affected by the restrictions imposed by Beijing on the export of rare earth materials, along with U.S. President's threats to impose 100% tariffs on Chinese imports and impose controls on the export of American software starting November 1.
Oil prices had seen a decline during trading last week, recording their lowest levels since May, before stabilizing with a more conciliatory tone between the two parties.
Although the selling wave in the markets remains limited at present, observers expect geopolitical issues to remain at the forefront of attention in the coming period.
In a research note, Daniel Hines, an analyst at ANZ Bank, said: "The oil industry continues to be affected by geopolitical developments."
He added: "China announced that it will impose tariffs on ships owned by American entities as soon as they arrive at its ports, including oil tankers, leading to the cancellation of several last-minute trips and an increase in shipping prices."
