Oil prices rose about 1% on Wednesday, reversing early losses as the market took a bullish view on China’s stance on potential trade talks with the United States, though gains were capped by continuing fears that the trade war will curb energy demand.
Brent crude futures rose 53 cents, or 0.82%, to $65.20 U.S. a barrel, while U.S. West Texas Intermediate crude rose 52 cents. 0.85%, to $61.85.
Prices waned in early trading but analysts said momentum shifted after a Bloomberg report quoted an anonymous source as saying that China wants more respect from the Trump administration before it will agree to talks.
The source was also quoted as saying that China also wanted the U.S. to appoint a new primary contact in future talks.
Global petroleum demand is expected to grow at its slowest for five years in 2025 and U.S. production gains will also taper off because of U.S. President Donald Trump’s tariffs on trading partners and their retaliatory moves, the International Energy Agency said on Tuesday.
Global oil demand this year is expected to rise by 730,000 barrels per day (bpd), the IEA said, down sharply from the 1.03 million bpd it forecast last month. The reduction is larger than a cut in demand estimates made on Monday by the Organization of the Petroleum Exporting Countries (OPEC).
Concerns over Trump’s escalating tariffs, combined with rising output from the OPEC+ group comprising OPEC and allies such as Russia, have already weighed oil prices down by about 13% this month.
