Oil Prices Rebound Slightly on Trade Talk Optimism Despite Demand Concerns

Oil prices edged higher on Thursday, recovering slightly after a sharp drop the day before, as markets responded to renewed optimism over upcoming trade negotiations between the United States and China, the world’s two largest oil consumers.

Brent crude futures rose by 10 cents, or 0.2 percent, reaching $61.22 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 13 cents to trade at $58.20 a barrel as of 9:32 a.m. Saudi time.

The slight rebound was attributed to hopes that weekend trade talks could ease tensions between Washington and Beijing, which have been locked in a protracted dispute that has weighed on global markets and dampened energy demand forecasts.

“Optimism around the US and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said Tina Teng, an independent market analyst. “Signs of a de-escalating trade war improved market sentiment, triggering a rebound in oil prices in an oversold market.”

U.S. Treasury Secretary Scott Bessent is set to meet China’s top economic official in Switzerland on May 10, a move seen as a potential step forward in efforts to resolve the ongoing trade dispute. While U.S. President Donald Trump stated that China had requested the discussions, he emphasized that he would not consider lifting tariffs merely to facilitate the talks.

Bessent also played down expectations, describing the meeting as an opening dialogue rather than a signal of advanced negotiations.

Despite the trade optimism, concerns over weak oil demand continued to weigh on the market. On Wednesday, the U.S. Federal Reserve kept interest rates unchanged and cited growing economic uncertainty, which bolstered the U.S. dollar and added pressure to commodity markets.

“A stronger dollar makes dollar-priced commodities like oil more expensive for buyers using other currencies, curbing demand,” analysts from ING wrote in a report on Thursday.

Additionally, data showing a rise in U.S. gasoline inventories last week raised further concerns about domestic consumption, especially as the summer driving season approaches — a period typically marked by higher fuel demand.

Meanwhile, supply-side pressure is also mounting. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, are preparing to ramp up production, potentially adding more weight to already fragile market dynamics.

While prices ticked up on Thursday, analysts cautioned that sustained recovery will depend heavily on the outcome of U.S.-China trade discussions and future signals from central banks regarding economic growth.