FX.co ★ Oil Rises on Hopes of Easing US-China Trade Tensions

On Tuesday, WTI crude oil futures climbed to $59.7 per barrel, building on the gains from Monday as optimism grew regarding the potential alleviation of US-China trade tensions. US President Trump adopted a more conciliatory tone towards China on Sunday, indicating a willingness to negotiate a deal with Beijing. This came shortly after he had threatened to impose additional 100% tariffs on Chinese imports and implement export controls. Further enhancing the positive outlook, Treasury Secretary Scott Bessent confirmed on Monday that plans are still in place for Trump to meet with Chinese President Xi Jinping in South Korea later this month. Meanwhile, prices received an additional boost when Trump mentioned the possibility of supplying Ukraine with long-range Tomahawk missiles, which heightened concerns about further disruptions in Russian oil supplies. Despite these developments, the rise in oil prices was tempered by ongoing fears of a supply surplus, due to increased production from both OPEC+ and non-OPEC+ countries. In addition, geopolitical risk premiums have decreased following an agreement between Israel and Hamas on the initial stage of a U.S.-mediated ceasefire and prisoner exchange plan in Gaza.