Oil Prices Edge Higher Amid Trade Talk Uncertainty

SINGAPORE: Oil prices saw slight gains in early trading on Monday, yet remained constrained by ongoing uncertainty surrounding trade negotiations between the United States and China. This ambiguity casts a shadow over the prospects for global economic expansion and fuel demand. Additionally, the possibility of OPEC+ increasing its supply adds to the prevailing pessimism.

Brent crude futures and U.S. West Texas Intermediate crude both experienced upward movement for a third consecutive session, rising by 9 cents to $66.96 and $63.11 a barrel, respectively, as of 0025 GMT.

Analyst Comments

According to Michael McCarthy, chief executive officer of online trading platform Moomoo Australia, the lack of definitive news is contributing to a modest increase in oil prices. Traders are reportedly positioned with short positions in anticipation of a potential increase in OPEC+ supply from the meeting on May 5, as well as a significant production surge in the United States.

OPEC+ Meeting Expectations

It is anticipated that some members of the Organization of the Petroleum Exporting Countries and their allies, collectively known as OPEC+, may propose accelerating oil output increases for the second month in a row during their meeting scheduled for May 5.

Recent Price Declines

Concerns about oversupply, coupled with anxieties regarding the impact of tariffs on the global economy, led to declines of over 1% in both Brent and WTI prices last week.

Trade War Developments

The market has faced turbulence due to conflicting messages from U.S. President Donald Trump and Beijing concerning progress in de-escalating the trade conflict, which poses a threat to global economic growth.

In the latest statement from Washington, U.S. Treasury Secretary Scott Bessent did not affirm President Trump’s assertion that negotiations with China were ongoing. Previously, Beijing had refuted claims of any active discussions.

During the International Monetary Fund and World Bank Spring Meetings, numerous participants indicated that the Trump administration remained divided in its demands from trading partners affected by the imposed tariffs.

Other Factors Influencing Oil Prices
  • Nuclear talks between Iran and the United States in Oman are also being closely monitored by investors this week. Iranian Foreign Minister Abbas Araqchi expressed continued caution regarding the success of these negotiations.
  • In Iran, a major explosion at the port of Bandar Abbas resulted in at least 40 fatalities and over 1,200 injuries, according to state media reports on Sunday.
  • Furthermore, on Sunday, senior officials within the Trump administration urged Russia and Ukraine to advance toward a peace agreement, following a meeting between President Trump and Ukrainian President Volodymyr Zelenskiyy at the Vatican the previous day.