During the peak of trade hostilities between the two nations in March and April, oil prices fell precipitously.
After plunging to five-month lows the day before, oil prices recovered some of their losses Monday as investors anticipated that possible negotiations between the presidents of the United States and China would reduce trade tensions between the two biggest economies and oil users in the world.
By 0045 GMT, Brent oil futures had up 87 cents, or 1.39%, to $63.60 a barrel after dropping 3.82% on Friday to its lowest level since May 7.
At $59.77 a barrel, U.S. West Texas Intermediate oil was up 87 cents, or 1.48%, after dropping 4.24% to its lowest level since May 7.
Trade tensions between the United States and China escalated this week as China increased export restrictions on rare earth products, prompting U.S. President Donald Trump to respond on Friday by imposing 100% tariffs on China’s exports to the United States and enacting additional export restrictions on “any and all important software” by November 1.
The actions precede a possible meeting between Trump and Xi later this month, according to U.S. Trade Representative Jamison Greer, on the margins of the Asia-Pacific Economic Cooperation conference in South Korea.
Goldman Sachs analysts noted that the main market concern is whether the proposed measures will actually be enforced—potentially disrupting global supply chains, particularly in high-tech sectors—or whether they are primarily bargaining tactics ahead of bilateral discussions at the APEC meeting in South Korea later this month.
While there remains a possibility of escalating trade tensions with higher tariffs or stricter export controls, the analysts believe the more probable outcome is that both sides ease their most aggressive measures, leading to a continuation—or even indefinite extension—of the tariff escalation pause initiated in May.
During the peak of trade hostilities between the two nations in March and April, oil prices fell precipitously.
As he travels to Israel ahead of the anticipated release of Israeli captives and Palestinian detainees as part of the precarious truce he mediated, Trump said Sunday that the battle in Gaza is over.