Brent holds steady as some US-China trade concerns ease

The front-month ICE Brent contract has declined by $0.35/bbl on the day, to trade at $65.20/bbl at 09.00 GMT.

IMAGE: Oil barrels. Getty Images

Upward pressure:

Brent’s price felt some upward pressure following a pause in the tariff saga between China and the US – the world’s top two oil consumers, after a successful meeting in Geneva, Switzerland.

“Sentiment across risk assets improved with the pause in US-China tariffs,” two analysts from ING Bank noted.

Over the weekend, Washington decided to reduce levies on most Chinese goods from 145% to 30% and Beijing agreed to lower tariffs on US goods from 125% to 10% for a 90-day initial period.

“The move to reduce tariffs for 90 days was certainly more aggressive than many expected, highlighted by the big upward moves in risk assets, including oil,” ING Bank analysts added.

Downward pressure:

While demand remains a major concern for the oil market, additional supply from OPEC+ is expected to increase oil supply through the rest of the year and subsequently put downward pressure on Brent’s price.

“The supply side should keep downward pressure on the market,” ING Bank analysts noted.

Last month, the Saudi Arabia-led group of oil producers surprised the global oil market by announcing plans to increase the group's output to 411,000 b/d for May and to extend that increase through June – the second month in a row. The group plans to expedite the unwinding of their joint 2.2 million b/d output cuts.

Aparupa Mazumder

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