Oil prices edge higher as U.S.-China trade talks continue

Investing.com-- Oil prices eked out modest gains Tuesday as investors cautiously awaited the outcome of ongoing U.S.-China trade talks in London.

At 04:50 ET (09:50 GMT), Brent Oil Futures rose 0.2% to $67.19 per barrel and West Texas Intermediate (WTI) crude futures gained 0.2% to $65.43 per barrel.

Both contracts were set for their fifth consecutive gain, building on a more than 4% jump last week as prospects of trade talks between the U.S. and China reduced worries of a global economic slowdown.

U.S.-China trade talks in focus

Senior U.S. officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, met Chinese Vice Premier He Lifeng in London to discuss tariff rollbacks, export controls, and broader bilateral trade concerns.

These top officials are continuing discussions in London Tuesday, aiming to resolve export control disputes over key goods like rare earths, which risk disrupting global supply chains and slowing growth.

“Trade talks between the US and China appear to be progressing, with discussions set to continue today. The U.S. 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,” ING analysts said in a note.

Markets are hoping for signs of progress that could ease pressure on global trade flows and commodity demand.

Crude markets have suffered for much of this year from global trade worries and weak macroeconomic indicators out of China.

"The latest trade data shows that Chinese crude oil imports were relatively weak in May, coming in at around 11m b/d, down 5.7% month-on-month and 0.8% lower year-on-year," ING added.

The decision by the Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, to steadily accelerated production this year has also weighed heavily.

U.S.-Iran nuclear talks struggle for progress

Iran announced it will soon submit a “reasonable, logical, and balanced” counter‑proposal to the U.S. nuclear deal via Oman, signalling continued dialogue amid unresolved uranium enrichment issues, an outcome that keeps sanctions in place and constrains Iranian oil supply.

Iran is a major oil producer. If sanctions were lifted, millions of barrels per day could re-enter global markets, increasing supply and pushing prices down.

“Nuclear talks between Iran and the US don’t appear to be progressing, providing some tailwinds for prices. Iran is not willing to compromise on its right to enrich uranium, something the US won’t accept,” ING analysts added.

Ayushman Ojha contributed to this article