(RTTNews) – Crude oil rose on Friday after US President Donald Trump suddenly reversed his tough stance on China, which could boost energy demand as confidence in bilateral trade ties increases.
WTI crude oil for November delivery was last seen trading up $0.20 (or 0.35%) at $57.66 a barrel.
The US and China are the world’s largest economies and talks were on track to end the “tariff war” for the last four-five months.
Last week, trade tensions between the US and China flared up again as China banned exports of its rare earth minerals, angering US President Donald Trump, who announced new 100% tariffs on Chinese exports to the US, raising concerns of a possible recession in the economy and lower energy demand.
Trump had earlier indicated he would not be visiting Chinese President Xi Jinping in South Korea later this month, as previously planned.
However, in an interview with Fox Business broadcast today, Trump struck a different note by being surprisingly pragmatic when he said 100% tariffs were not sustainable. He also confirmed the meeting with Xi as scheduled and expressed his appreciation for him.
Trump’s change in tone led the market to ease US-China bilateral trade relations and this led to an increase in energy demand.
The Gaza peace plan proposed by Trump is now almost complete. The exchange of prisoners and detainees between Israel and Hamas is now complete. No adverse incidents have been reported so far since the implementation of the ceasefire. The geopolitical risk premium that existed earlier has now disappeared.
After brokering a successful peace deal in the Middle East, Trump has set his sights on ending the Russia-Ukraine war.
Yesterday, Trump announced that he will meet with Russian President Vladimir Putin in Budapest, Hungary in the next 2-3 weeks with “high-level delegations” to discuss ways to end the conflict. This increases the possibility of more Russian oil coming into the market.
Yesterday, data released by the US Energy Information Administration showed that crude oil inventories increased by 3.524 million barrels for the week ending October 10. Economists had expected crude oil inventories to rise by 0.1 million barrels.
At 423.8 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.
For the same period, gasoline inventories declined by 267,000 barrels, distillate inventories declined by 4,529,000 barrels, and heating oil inventories declined by 519,000 barrels.
Additionally, the data indicated an increase in US production by 13.636 million barrels per day.
In the U.S., for the week ended Oct. 17, crude oil rigs were unchanged at 418 from the previous week and total rigs rose to 548 from 547 the week before, Baker Hughes Co. reported today.
In its most recent monthly oil market report, the OPEC alliance kept its global oil demand growth forecasts for 2025 and 2026 unchanged at 1.3 million barrels per day and 1.4 million barrels per day, respectively. Similarly, the group also maintained its supply projections and expects supplies from producers outside the broader OPEC+ alliance to rise by 810,000 barrels per day in 2025 and 630,000 barrels per day in 2026.
The government shutdown in the US has entered its 17th day.
US Federal Reserve Chairman Jerome Powell this week acknowledged a sharp slowdown in hiring and signaled the need to end quantitative tightening.
Even in the absence of major official economic releases, expectations for a rate cut by the US central bank remain high among traders.
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