Oil Prices Climb Above $65 as Markets Eye US-China Trade Negotiations

Oil prices continued to rise on Monday, with West Texas Intermediate (WTI) crude surpassing $65 a barrel—the highest level since early April—as traders awaited the outcome of renewed trade talks between the United States and China.

Negotiators from both nations met in London, offering a glimmer of hope for progress on long-standing trade disputes that have impacted global markets throughout the year. The talks have fueled optimism among energy traders that easing tensions between the world’s two largest economies could support demand growth and stabilize global trade.

Oil has rebounded significantly from earlier declines caused by surging OPEC+ production and concerns over weakening demand due to tariff-related uncertainties. The prospect of a resolution between Washington and Beijing, combined with the arrival of the peak summer demand season, has led to a tightening outlook in the oil market.

In the futures market, near-term U.S. crude contracts are trading almost $1 higher than contracts for the following month—a pricing pattern known as backwardation, which often signals short-term supply tightness.

“It is hard to hold on to a bearish outlook conviction when spot market signals are relentlessly bullish,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. He noted that while the summer season typically boosts oil consumption, it could also mask potential underlying weaknesses in the market.

The combination of geopolitical optimism and strong seasonal demand is currently driving bullish sentiment, with analysts and traders closely watching developments in the US-China negotiations for further direction.

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