FX.co ★ Brent Prices Reverse Early Gains

Brent crude oil futures experienced a decline, settling at $65.4 per barrel on Monday, as apprehensions regarding an abundant global supply overshadowed the positive sentiment surrounding a potential trade agreement between the US and China. Initially, oil prices had seen an uptick following an announcement by US Treasury Secretary Scott Bessent, who revealed that a "substantial framework" had been reached with Chinese Vice Premier He Lifeng. This framework is slated for discussion when the leaders of the two nations convene later this week. The discussions encompass a broad array of topics, such as export controls, tariff suspensions, fentanyl-related tariffs, and agricultural trade. The buoyancy in oil prices was further reinforced by ongoing concerns over Russian supply disruptions, exacerbated by new US sanctions imposed on Rosneft and Lukoil, which together constitute approximately half of Russia's daily oil output. Despite this, the International Energy Agency (IEA) pointed out that the oil market is projected to remain in surplus, with the "American quintet"—comprising the US, Canada, Brazil, Guyana, and Argentina—producing at rates that surpass demand growth.