Oil prices rose slightly following reports that the United States and China have reached an agreement in principle on a framework aimed at easing trade tensions between the world’s two largest oil consumers.
Brent crude, the international benchmark, climbed by 0.19% to $66.35 per barrel, up from $66.22 at the previous session’s close. Similarly, US West Texas Intermediate (WTI) increased by 0.15% to $63.95 per barrel, compared to $63.85 the day before.
The modest gains followed announcements from both governments indicating that progress had been made during two days of negotiations in London. The talks focused heavily on easing restrictions around the export of rare earth minerals—critical components in technologies ranging from electric vehicles to smartphones.
US Commerce Secretary Howard Lutnick confirmed that the two sides had agreed to a preliminary framework, which now awaits approval from Presidents Donald Trump and Xi Jinping. “We have reached a framework to implement the Geneva consensus,” Lutnick told reporters, referring to the outcome of recent discussions between the two leaders.
China’s Vice Commerce Minister Li Chenggang echoed this sentiment, noting that the framework aligns with the consensus reached during a phone call between the presidents on June 5.
Key sticking points included US complaints about China’s delayed release of rare earth exports, and Beijing’s concerns over Washington’s restrictions on Chinese access to critical technologies, such as semiconductors and artificial intelligence systems.
Although markets responded positively to the diplomatic breakthrough, analysts noted that price movements remained modest due to investor caution. “Traders are waiting for concrete details and final approval before fully pricing in the impact,” one analyst noted.
Meanwhile, supply data from the US added to market momentum. The American Petroleum Institute (API) reported an unexpected draw of 370,000 barrels in US crude stockpiles last week, compared to market expectations of a 700,000-barrel build. The official data from the Energy Information Administration (EIA) is expected later today. Should it confirm the drawdown, analysts believe oil prices could see further upward support.
Despite the cautious optimism, market sentiment remains sensitive to any shift in trade policy or geopolitical developments that could affect demand and supply balances globally.
