OPEC+ Output Hike Offset by U.S.-China Trade Hopes
Oil prices are holding steady ahead of Monday’s high-level U.S.-China trade talks in London. The optimism surrounding a potential deal is helping to counterbalance concerns over a July production increase from the OPEC+ alliance.
The group confirmed it would move forward with its previously announced 411,000 barrels per day hike, rejecting calls from Saudi Arabia for a more aggressive output push. HSBC noted that the market appears balanced going into the summer months, with demand expected to peak in July-August, matching the incremental supply from OPEC+.
Fed Rate Cut Bets Rise After Goldilocks Jobs Report
Friday’s U.S. jobs data also provided support to oil, with traders viewing the report as a “Goldilocks” print—strong enough to indicate stability but soft enough to raise expectations for a Federal Reserve rate cut.
The unemployment rate held at 4.2%, while job growth slowed modestly to 139,000. Lower rates could stimulate broader economic activity and, by extension, energy demand. West Texas Intermediate (WTI) posted a 4.9% weekly gain, while Brent added 2.75%, snapping a two-week losing streak.
China Data Weakens, but Trade Optimism Remains in Focus
Despite disappointing Chinese economic indicators—including falling exports and deepening factory gate deflation—markets remain focused on potential trade progress.
Crude oil imports in China fell to a four-month low in May as refiners initiated planned maintenance. Yet investors appear to be prioritizing signs of renewed diplomacy between the U.S. and China, after Presidents Trump and Xi spoke last Thursday in a call described as “very positive” by the White House.
