By Shariq Khan
NEW YORK (Reuters) – Oil prices rose over 1% on Friday and were set for their first weekly gains since mid-April as a U.S. trade deal with United Kingdom turned investors optimistic ahead of talks between top officials from Washington and Beijing.
Brent crude rose by 98 cents, or 1.6%, to $63.82 a barrel by 2:03 p.m. ET (1803 GMT). U.S. West Texas Intermediate crude was up $1, or about 1.7%, at $60.91.
Week-over-week, both benchmarks were on track to rise over 4%.
U.S. President Donald Trump said China should open its market to the U.S., and that 80% tariffs on Chinese goods “seems right”, a day after he announced a deal lowering tariffs on British car and steel exports, among other agreements with the United Kingdom.
“Energy markets – as bearish as they’ve been – are finally shaking off some of the pessimism and catching the broader market optimism that’s showing back up as progress on trade relationships has begun,” said Alex Hodes, oil analyst at brokerage StoneX.
The UK agreement and Trump’s comments on China have raised hopes for similar deals between Washington and Beijing. U.S. Treasury Secretary Scott Bessent was to meet with China’s top economic official Vice Premier He Lifeng in Switzerland on May 10.
Current U.S. tariffs on Chinese imports stand at 145%.
“While prohibitively high, you can’t knock the math … 80% is substantially less than 145%,” Hodes wrote to clients.
Chinese exports rose faster than expected in April while imports narrowed their decline, customs data showed on Friday, giving Beijing some relief ahead of the talks. [TRADE/CN]
Rising hostilities in the Middle East also boosted oil prices this week, Nikos Tzabouras, senior market analyst at trading platform Tradu said.
Israel’s military said it had intercepted a missile launched from Yemen towards its territory, days after Oman mediated a ceasefire between the U.S. and Yemen’s Houthis, who claimed responsibility for Friday’s attack.
On Thursday, the U.S. imposed sanctions on a third Chinese independent oil refinery for purchases of Iranian crude, ahead of a fourth round of nuclear talks in Oman this weekend.
Keeping a ceiling to oil price gains this week was the planned increase to oil output by the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+.
However, a Reuters survey found that OPEC oil output edged lower in April as production declines in Libya, Venezuela and Iraq outweighed a scheduled increase in output.
(Reporting by Shariq Khan, Enes Tunagur, Seher Dareen, Mohi Narayan and Sudarshan Varadhan; Editing by David Goodman, Louise Heavens, David Evans and David Gregorio)
