Oil prices increased in early trading on Monday, according to Reuters, following announcements from U.S. and Chinese economic officials detailing a trade-deal framework. This development alleviated concerns that tariffs and export restrictions between the world’s two largest oil consumers would negatively impact global economic growth.

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Brent crude futures rose 46 cents, or 0.7%, to $66.40 a barrel by 0027 GMT. U.S. West Texas Intermediate crude futures increased by 46 cents, or 0.75%, to $61.96. These gains followed significant rises of 8.9% and 7.7%, respectively, in the previous week, which were driven by U.S. and EU sanctions on Russia.

Haitong Securities noted in a report that market expectations have improved due to the new sanctions on Russia and the easing of U.S.-China tensions, which has countered earlier concerns about a crude oversupply that had driven prices down in October.

U.S. Treasury Secretary Scott Bessent stated on Sunday that top Chinese and U.S. economic officials had established a “very substantial framework” for a trade deal during meetings in Kuala Lumpur. This framework would allow President of the United States Donald Trump and President Xi Jinping to discuss trade cooperation later this week.

Bessent explained that the framework would prevent the imposition of 100% U.S. tariffs on Chinese goods and secure a deferral of China’s rare-earth export controls. President Trump also expressed optimism on Sunday, saying, “I think we’re going to have a deal with China. We’re going to meet them later in China and we’re going to meet them in the U.S., either Washington or Mar-a-Lago.”

Market analyst Tony Sycamore at IG said the positive trade-deal framework helps counterbalance worries that Russia could mitigate the impact of new U.S. sanctions, which target Rosneft and Lukoil, by offering deeper discounts and utilizing shadow fleets to attract buyers.

However, Haitong Securities analyst Yang An cautioned, “if sanctions on Russian energy are less effective than expected, oversupply pressures could return to the market.”

Source: IndexBox Market Intelligence Platform