Oil prices remained firm early Monday, supported by optimism surrounding upcoming U.S.-China trade negotiations in London. Brent crude held steady at $66.47 per barrel, while U.S. West Texas Intermediate (WTI) inched up by 1 cent to $64.59.
Investors are closely watching the first official meeting of the U.S.-China economic and trade consultation mechanism, as top aides to President Donald Trump prepare to meet their Chinese counterparts. This follows a rare call between U.S. and Chinese leaders last Thursday, aiming to ease tensions amid ongoing disputes and China's export curbs on rare earth elements that have disrupted global supply chains.
The anticipation of a trade deal that could boost global economic activity and oil demand helped crude prices notch their first weekly gain in three weeks. Additional support came from the latest U.S. jobs data, which showed steady unemployment in May, increasing market expectations of a Federal Reserve interest rate cut.
In Asia, China's inflation data due Monday is also in focus, offering insight into domestic demand from the world’s largest crude importer.
Meanwhile, supply-side concerns linger as OPEC+ prepares to ramp up output. The group announced a significant production increase for July, with expectations of further hikes in August and September. HSBC warned that these rising supply levels could threaten its Brent crude forecast of $65 per barrel for Q4 2025.
Analysts at Capital Economics believe the faster pace of OPEC+ output growth may become a long-term trend, adding downward pressure on prices despite positive demand signals from improved trade relations and economic indicators.
Oil markets are now balancing between geopolitical developments and shifting supply dynamics, with traders eyeing the impact of policy and production changes in the months ahead.


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