Crude Oil Rises As US-China Talks Fuel Optimism

U.S. West Texas Intermediate (WTI) futures traded 1.26% higher at $66.22 per barrel during the day, before paring some of the gains.

Crude oil prices rose 0.90% on Tuesday with talks between U.S. and Chinese government officials in London entering the second day, as the two countries seek to resolve export control disputes over semiconductors and rare earth resources.

U.S. West Texas Intermediate (WTI) futures traded 1.26% higher at $66.22 per barrel during the day, before paring some of the gains.

Brent futures rose 1.34% to $67.94 per barrel before losing some steam.

“There's a sense of optimism around these trade talks; the market is waiting to see what this will produce, and that is supporting prices,” Harry Tchilinguirian, group head of research at Onyx Capital, told Reuters.

Investors appeared to remain cautiously optimistic on Tuesday, with the Dow Jones up 0.24% and the S&P 500 gaining 0.33%.

This week’s gain in crude oil prices builds on the momentum from the previous one, when futures surged over 3%.

Analysts at ING underscored that progress in trade talks between the U.S. and China is helping crude oil shore up some gains.

“The US also appears willing to ease some tech export restrictions in return for China easing limits on rare earth exports. This is providing some support to the market,” the firm said in a recent note.

Howard Lutnick, the U.S. Secretary of Commerce, said talks between the two countries are “going well.”

White House economic advisor Kevin Hassett confirmed that the U.S. is open to easing export controls on some semiconductor chips in exchange for China speeding up the delivery of rare earth resources.

Meanwhile, crude oil ETFs surged over 2% on Tuesday before losing most of the gains.

The United States Oil Fund LP (USO) was down 0.19%, while the ProShares Ultra Bloomberg Crude Oil (UCO) edged 0.02% lower at the time of writing.

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