Oil held onto a weekly gain as a renewed round of US-China trade talks offered the potential for reduced global tensions.
Brent traded above $66 a barrel after adding 4% last week. Negotiators from the US and China were set to hold talks in London on Monday, raising the possibility the two largest economies can make progress on disputes that have rattled markets this year.
Though crude has retreated by 11% in London this year on concern that escalating trade tensions could hinder global growth and energy demand, prices have become stuck in a narrow band over the last month. Traders are weighing signs of progress in trade talks and the looming peak summer demand season against the announcement of bumper output hikes by the OPEC+ alliance.
While a gauge of volatility is near the lowest since early April, the futures curve is still in a bullish pattern. The nearest US crude futures are trading close to $1 above the next month, which indicates tight short-term supplies.
“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. “Summer peak oil demand may disguise emerging oil market weakness.”
Prices:
Brent for August settlement was little changed at $66.56 a barrel as of 10:11 a.m. in London.
WTI for July delivery traded at $64.66 barrel.
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