Brent edges up following US-China trade meeting

The front-month ICE Brent contract has gained by $0.13/bbl on the day, to trade at $64.66/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent’s price has gained some support following the meeting between US President Donald Trump and Chinese President Xi Jinping. The two leaders convened in South Korea yesterday to discuss ways to ease trade tensions and bolster economic cooperation between the two nations.

Market participants are now assessing the impact of this meeting.

Earlier this week, US Treasury Secretary Scott Bessent said that US and Chinese negotiators had reached a positive framework, removing the immediate need of a 100% tariff escalation on Chinese imports.

“There was also hope that China would agree to purchases of US oil & gas as part of a broader US-China deal,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes. 

Downward pressure:

The OPEC+ alliance is set to hold a virtual meeting on Sunday to decide on production quotas for December. Market participants anticipate the group will approve another supply hike of 137,000 b/d, potentially exerting further downward pressure on Brent’s price.

“OPEC+ is scheduled to meet this weekend, with the expectation that the group will agree on an output hike for December,” two analysts from ING Bank said.

The uncertainty surrounding sanctions on Russian energy exports may support OPEC’s decision to raise output, according to market analysts.

“The move [OPEC’s production hike for December] will only reinforce the bearish outlook for the market, adding to the substantial surplus expected through 2026,” ING Bank’s analysts added.

By Aparupa Mazumder

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