Oil Prices Slip Amid US-China Trade Talks, Poised for Weekly Gain

Oil prices experienced slight declines on Friday but were positioned for their first weekly gains in three weeks following renewed trade talks between U.S. President Donald Trump and Chinese leader Xi Jinping, which sparked optimism about economic growth and increased demand. Brent crude futures and U.S. West Texas Intermediate crude both edged down by around 0.2-0.3%, yet Brent rose over 2% and WTI nearly 4% for the week. The market remains sensitive to geopolitical risks such as potential U.S. sanctions on Venezuela and possible Israeli strikes on Iranian infrastructure, which could drive prices higher, while increased production from OPEC+ and non-OPEC countries exerts downward pressure. Saudi Arabia reduced its July crude prices to Asia less than expected despite an agreed OPEC+ output increase of 411,000 barrels per day, reflecting its strategy to regain market share. Analysts note that, amid eased macroeconomic uncertainties and the approach of peak demand season, the risk of sharp oil price drops has diminished, though investors remain cautious about potential oversupply later this year and into 2026. Additionally, ongoing trade discussions not only between the U.S. and China but also involving Canada underline the broader economic factors influencing oil markets.