Oil Prices Edge Higher as U.S.-China Trade Talks Fuel Demand Optimism

Oil prices ticked higher on Tuesday, driven by investor optimism over U.S.-China trade talks in London that could ease geopolitical tensions and bolster global fuel demand.

Crude Futures Rise

• Brent crude rose 0.3% to $67.26 per barrel, building on Monday's gains that marked the highest level since April 28.

• U.S. West Texas Intermediate (WTI) crude climbed 0.3% to $65.47 per barrel as of 06:45 GMT.

The momentum came after a favorable U.S. jobs report and rising hopes of a trade truce, which have collectively supported a more bullish sentiment in energy markets.

All Eyes on London Talks

Negotiations between top U.S. and Chinese officials entered their second day in London, with key issues such as tariffs, export controls, and rare earth supplies on the table. A successful outcome could alleviate global supply chain constraints and boost economic growth, both of which are positive indicators for crude demand.

President Donald Trump said on Monday that the talks were “going well,” further fueling optimism in commodities.

Supply Risk from Canada Adds Support

Goldman Sachs analysts noted that the market has been supported not only by improving demand outlook but also by supply risks, particularly due to wildfires in Canada affecting North American oil output.

Iran Nuclear Deal in Focus

On the geopolitical front, Iran is preparing a counterproposal to the U.S. over a nuclear agreement, pushing back against Washington's terms. President Trump signaled continued friction, especially regarding Iran's right to enrich uranium on home soil—another potential wildcard for global oil supply.

Market Sentiment Tracker

For real-time insights into how investor sentiment is shifting based on these developments, keep an eye on the Commodities data feed and monitor macroeconomic triggers through the Economics Calendar.