Global oil prices edged lower on Monday due to a growing imbalance between demand and supply, even as optimism rose over a temporary easing of U.S.-China trade tensions.
Brent crude, the international benchmark, slipped by 0.1% to $64.69 per barrel, while U.S. benchmark West Texas Intermediate (WTI) fell 0.09% to $61.57 per barrel, down from its previous close of $61.63.
The dip follows a breakthrough in weekend trade talks in Switzerland, where the United States and China agreed to a 90-day tariff rollback. Beginning May 14, the U.S. will cut tariffs on Chinese imports from 145% to 30%, while China will reduce duties on American goods from 125% to 10%.
At a White House press briefing, President Donald Trump called the Geneva talks a “fresh start” and confirmed China’s commitment to suspending and ultimately eliminating non-monetary trade barriers. China’s Ministry of Commerce hailed the agreement as a key step toward narrowing economic differences.
Trump also addressed the upcoming Russia-Ukraine negotiations in Türkiye, saying he was open to attending if necessary, depending on his Middle East travel plans.
Despite the easing trade tensions, oil markets remain under pressure from supply-side developments. Last week, eight members of the OPEC+ alliance announced plans to significantly boost output—tripling earlier projections. Major producers, including Saudi Arabia and Russia, pledged to ramp up production, pushing oil prices to their lowest levels since February 2021.
Analysts warn that the move could flood the market with crude in the coming months, potentially outweighing any short-term gains from improved trade flows or geopolitical negotiations.
Investors are also keeping a close watch on U.S. inflation data, with April’s Consumer Price Index (CPI) figures expected later today. The report could shape the Federal Reserve’s next steps on interest rates.
In its latest statement, the Fed flagged growing risks tied to inflation and unemployment. Chair Jerome Powell cautioned that tariff-related pressures might elevate inflation and slow job creation, raising concerns about broader economic growth.
Economists suggest that a hotter-than-expected CPI reading could prompt the Fed to hold off on further rate cuts—adding more downward pressure on oil prices in the near term.
