Oil Prices Rise After Reducing Losses in the Opening Session

SadaNews - Oil prices rose after reducing their losses in the weekly opening session, as investors balanced the implications of renewed trade tensions between the United States and China against global demand prospects.

Brent crude traded above $63 a barrel after rising in the previous session following a drop of 3.8% on Friday, while West Texas Intermediate crude stabilized around $60 a barrel.

U.S. President Donald Trump softened his tone towards China after promoting a new round of tariffs and export restrictions late last week, indicating his openness to reaching an agreement with Beijing.

Renewed Trade War Deepens Market Uncertainty

The resumption of the trade conflict between the world’s largest oil consumers has brought a degree of uncertainty back to future forecasts. Prices have declined over the past two weeks after the OPEC+ alliance increased supplies amid fears of an expected surplus later this year.

In its monthly report released on Monday, OPEC projected that global oil demand would grow by 1.3 million barrels per day this year, and 1.4 million barrels per day by 2026, which is an optimistic view amid forecasts from other entities, such as the International Energy Agency, of a record surplus next year.

Vandana Hari, founder of the market analytics firm Vanda Insights in Singapore, said: "While the anticipation of surplus continues, oil remains susceptible to panic selling and cautious buying that only recovers a small part of the losses," adding that expectations for additional U.S. tariffs on China faded after Trump softened his aggressive tone over the weekend.

Signs of weakness have appeared in the Brent crude futures curve, as the forward spreads for contracts starting in March 2026 and several months thereafter have shifted into a contango state, a structure where near-term contracts trade at a discount compared to longer-term contracts.