Oil prices rose on Thursday, rebounding from the previous day’s losses after U.S. President Donald Trump and Chinese President Xi Jinping agreed to resume trade talks. Brent crude settled up 48 cents at $65.34 a barrel, while U.S. West Texas Intermediate gained 52 cents to $63.37. The renewed dialogue boosted market sentiment, with analysts suggesting improved trade relations could lift demand expectations in both countries.
The official Chinese news agency Xinhua confirmed the call was held at Trump’s request, and Trump later said the conversation had a “very positive conclusion.” Lower-level trade discussions are now expected to follow. Canada is also in talks with the U.S. over lifting tariffs, adding to a broader sense of easing trade tensions.
Despite the optimism, market fundamentals remain mixed. Wednesday’s data showed an unexpected surge in U.S. gasoline and distillate inventories, raising concerns about domestic demand. However, geopolitical risks and wildfire-related production cuts in Canada continue to lend support to prices.
OPEC+ output increases remain a limiting factor for further gains. Saudi Arabia, following the group’s decision to raise July output by 411,000 barrels per day, cut its crude prices for Asian buyers to near two-month lows. The move signals a strategy shift to regain market share and discipline overproducing members.
Economic indicators continue to cloud the outlook. U.S. jobless claims rose for a second week, and May’s services sector data showed contraction. Friday’s nonfarm payrolls report will be closely watched, with potential implications for future Federal Reserve interest rate decisions.