Oil prices rebounded on Thursday, rising around 3%, as optimism over upcoming trade talks between the United States and China—the world’s top two oil consumers—buoyed market sentiment. Brent crude futures settled up $1.72, or 2.8%, at $62.84 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed $1.84, or 3.2%, to close at $59.91.
The gains came as U.S. Treasury Secretary Scott Bessent prepared to meet China’s top economic official in Switzerland on May 10, sparking hopes of progress toward resolving the trade war that has rattled global markets and curbed demand growth. “Optimism around those talks was providing support to the market,” said SEB analyst Ole Hvalbye. However, analysts warned that volatility driven by tariffs was far from over. “The global risk premium that was pushing oil prices up and down during the past couple of years has been replaced by a tariff premium,” noted Jim Ritterbusch of Ritterbusch and Associates.
Meanwhile, the supply outlook remained complex. OPEC+ is set to increase oil output in the coming months, but a Reuters survey indicated that OPEC’s production edged lower in April, mainly due to declines in Venezuela, Iraq, and Libya. On the geopolitical front, sanctions on two Chinese refiners for purchasing Iranian oil highlighted the disruptions caused by U.S. pressure on Tehran. Analysts at Citi Research lowered their three-month Brent price forecast to $55 per barrel from $60, citing near-term supply pressure, but maintained their long-term outlook at $60 for the year. They also noted that a U.S.-Iran nuclear deal could push Brent down to $50, while a breakdown in negotiations could lift prices above $70.