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Global oil markets saw a significant rebound on Thursday, with prices surging nearly 3% following renewed optimism over impending trade negotiations between the United States and China — the world’s two largest oil consumers.
Crude Benchmarks Rise Sharply
- Brent crude futures rose $1.70 (2.8%) to settle at $62.82 per barrel
- US West Texas Intermediate (WTI) crude climbed $1.79 (3.1%) to reach $59.86 per barrel
The price boost comes ahead of a critical diplomatic meeting between US Treasury Secretary Scott Bessent and China’s top economic official, set to take place in Switzerland on May 10.
US Calls for India-Pakistan De-escalation But Refuses to Intervene
Trade Dispute Dampening Global Oil Demand
The ongoing trade war between Washington and Beijing has had a dampening effect on the global economy, particularly affecting industrial output and energy demand. Any progress in the talks could stimulate confidence in global growth, thereby lifting crude consumption forecasts.
“The fallout from their trade dispute was likely to lower crude consumption growth,” noted analysts, highlighting the stakes of the upcoming summit.
Analysts Warn of Ongoing Tariff-Driven Volatility
Despite Thursday’s rally, analysts were quick to caution that oil markets remain vulnerable to fluctuations triggered by geopolitical rhetoric and trade headlines.
“The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium,” said Jim Ritterbusch, head of US energy consultancy Ritterbusch and Associates, in a note.
“This tariff premium will also be fluctuating in response to the latest headlines out of the Trump administration.”
His remarks reflect market sensitivity to developments in trade diplomacy, particularly under the influence of US political dynamics.
OPEC+ Output Increase May Cap Gains
Meanwhile, pressure is also mounting from the supply side of the oil equation. The OPEC+ alliance, which includes major producers like Saudi Arabia and Russia, is reportedly preparing to increase oil output — a move that could restrain further price rallies.
While higher demand optimism driven by geopolitical diplomacy supports prices, surging supply levels could limit upside potential in the weeks ahead.
