Oil has changed a little as of Monday, as investors are eagerly awaiting the US-China trade talks that will be held in London. This deal is crucial since it could boost the global economic output and increase the fuel demand. If we look at the indexes The Brent Crude Futures gained 4 cents and were up by $66.51 per barrel as of 9:40 GMT ( 3:10 pm IST). On the other hand, the US WEST TEXAS INTERMEDIATE CRUDE lost a cent and was down at $64.57 per barrel. Brent Crude rose by 4%, and the WTI rose by 6.2% last week. This happened after Chinese President XI Jinping and US President Donald Trump got on a call on Thursday before the officials met in London on Monday in an attempt to calm the trade tensions between the two nations.
According to experts, this deal has the potential to support the global economic output and boost the demand for commodities, including oil. According to Tony Sycamore, who is an IG market analyst, Monday’s talks could dampen the impact of the slew of Chinese data releases.
If we look at the data, China is one of the largest exporters of oil. The US tariffs have badly choked the Chinese economy both at home and abroad, as the world’s second-largest economy was experiencing a situation of deflation and the Chinese export growth slowed down to a three-month low in the month of May. This created a pressure-like situation for the Chinese economy, which in turn forced them to regulate their oil and natural gas imports, which was like a shock to the OPEC+ countries.
The positive prospect of a trade deal between the US and China has created an optimistic environment for the OPEC + nations hence they’ve ramped up oil production. Let’s see what could be the outcome of this deal, if it’s a positive one then it could be a major breather for the world economy.
