LONDON: Oil prices rose by 1 per cent on Thursday, supported by optimism over potential progress in upcoming trade talks between the United States and China, the world’s two largest oil consumers.
Brent crude futures climbed 74 cents, or 1.2 per cent, to $61.86 a barrel, while US West Texas Intermediate (WTI) crude gained 80 cents, or around 1.4 per cent, to $58.87 a barrel as of 0912 GMT.
"The market has almost stabilised at slightly above $61 a barrel," said SEB analyst Ole Hvalbye, noting that cautious optimism over the planned US-China talks was providing support.
US Treasury Secretary Scott Bessent is scheduled to meet China’s top economic official on 10 May in Switzerland, aiming to ease tensions that have weighed on global economic growth and oil demand.
Meanwhile, analysts at Citi Research have lowered their three-month price forecast for Brent to $55 per barrel from $60, reflecting concerns over rising supply from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+. They maintained their long-term forecast of $60 a barrel for this year.
A potential US-Iran nuclear deal could also weigh on prices, potentially pushing Brent towards $50 per barrel if it results in increased supply. However, in the absence of such a deal, prices could surge above $70, Citi added.
Overnight, the US Federal Reserve left its policy rate unchanged but highlighted the risks of rising inflation and unemployment.
"The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer," ING analysts said in a note. "This boosted the US dollar, adding to headwinds for broader commodity markets."__ Reuters
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