Oil prices held near even on Thursday as traders weighed progress in U.S.-China trade talks against concerns of continued oversupply. Brent crude rose $0.08 (0.1%) to $65.00 a barrel, while U.S. West Texas Intermediate gained $0.09 (0.1%) to $60.57.
President Trump announced a one-year trade agreement with Chinese President Xi Jinping following their meeting in South Korea, under which the United States will reduce tariffs on Chinese goods from 57% to 47%. In return, China will resume purchases of U.S. soybeans, maintain rare earth exports, and strengthen enforcement against fentanyl production. The limited deal was viewed as a de-escalation rather than a full resolution of tensions, but was enough to stabilize financial markets.
Major oil producers Shell and TotalEnergies both reported lower quarterly profits, reflecting weaker oil prices. Shell’s results were supported by stronger gas trading margins, while TotalEnergies saw a modest decline driven by refining weakness.
Also supporting sentiment, the Federal Reserve lowered interest rates by a quarter of a percentage point on Wednesday. The move was widely expected and could boost future energy demand by reducing borrowing costs and stimulating economic activity. The Fed indicated, however, that further cuts this year are unlikely amid uncertainty from the ongoing government shutdown.
Despite Thursday’s modest rebound, both crude benchmarks are on pace for a 3% monthly loss in October, their third consecutive month of declines. U.S. production reached a new record of 13.6 million barrels per day last week, underscoring persistent supply pressure.
Investors are now focused on the upcoming OPEC+ meeting on November 2, where members are expected to confirm another 137,000 bpd output increase for December. Since April, the group’s incremental supply hikes have totaled over 2.7 million bpd, or roughly 2.5% of global production.
Saudi Arabia’s budget deficit widened sharply in the third quarter, rising to 88.5 billion riyals ($23.6 billion) as lower oil revenues and higher spending strained government finances. The data reinforced the economic challenges facing top producers as crude prices remain under pressure.