Oil prices traded narrowly on Monday as investors turned their attention to the upcoming U.S.-China trade negotiations in London, a development seen as critical for shaping global economic sentiment and energy demand for the second half of the year.
Brent crude oil, against which Nigerian oil is priced, gained 4 cents to trade at $66.51 per barrel while U.S. West Texas Intermediate (WTI) crude slipped by 1 cent to $64.57.
The cautious price movement reflects market uncertainty as traders weigh the potential impact of trade diplomacy against weakening economic indicators out of China.
Both Brent and WTI recorded strong gains last week, with Brent up 4% and WTI climbing 6.2%, fueled by renewed investor optimism that a breakthrough in trade talks between the world’s two largest economies could support broader commodity demand, including crude oil.
U.S. President Donald Trump and Chinese President Xi Jinping spoke last Thursday, setting the stage for today’s high-level meeting in London between U.S. and Chinese officials.
The talks aim to reduce trade tensions that have weighed heavily on investor confidence and disrupted global supply chains.
Market analysts say a successful outcome from the London meeting could trigger a further upside in oil prices by reinforcing demand expectations.
“A trade deal between the U.S. and China could support the global economic outlook and in turn boost demand for commodities including oil,” said Tony Sycamore, market analyst at IG. “However, today’s price action shows traders are waiting for concrete developments before extending last week’s rally.”
The cautious sentiment was further influenced by a series of underwhelming Chinese economic indicators released over the weekend. China’s export growth in May fell to a three-month low amid sustained U.S. tariff pressure.
In addition, the country’s factory-gate prices declined at the sharpest pace in two years, raising concerns about deflationary pressures and slowing domestic activity.
China’s crude oil imports also declined in May to the lowest daily rate in four months, driven by seasonal maintenance activities at both state-owned and independent refineries.
The decline in refinery demand raises short-term concerns about Asia’s contribution to global crude consumption.
“Bad timing for crude oil, which was testing the top of the range and knocking on the door of a technical break above $65,” Sycamore noted, referring to WTI’s recent resistance levels.
Despite these headwinds, the market is largely brushing aside concerns about increased supply from the OPEC+ alliance, which is expected to raise output quotas in the coming month. For now, focus remains on geopolitical and macroeconomic developments that could recalibrate global oil demand projections.
Analysts also point to ongoing volatility in the foreign exchange and equity markets, with oil trading increasingly linked to shifts in risk appetite across asset classes.
