Brent steady amid Sino-US trade talks

The front-month ICE Brent contract has remained unchanged on the day, to trade at $65.10/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price has gained some support following reports of fresh talks between US President Donald Trump and Chinese counterpart Xi Jinping.

The news has eased some economic concerns, supporting oil demand growth sentiment in the world’s two top oil consuming nations, analysts said. Both countries have resumed trade talks, Reuters reports.

Brent has found support “from optimism fuelled by a phone call between Presidents Donald Trump and Xi Jinping,” VANDA Insights’ founder and analyst Vandana Hari said.

“The two leaders agreed to resume trade negotiations, prompting relief after a recent escalation in tensions,” she added.

Downward pressure:

The prospect of further OPEC+ supply hikes continues to dent oil market sentiment. 

Last week, eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to collectively increase their supply by 411,000 b/d in July, compared to June’s production levels.

The coalition’s leader Saudi Arabia wants to increase oil supply to regain market share, according to media reports.

“We suspect OPEC is taking the opportunity of stronger seasonal demand and a lack of response from non-OPEC producers to regain market share,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “What is not clear is whether that will extend into the second half of the year,” he added.

By Aparupa Mazumder

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