Morning Highlights: Oil Climbs Amid US-China Trade Focus and Lower US Output

Market Snapshot (as of 06:15 EST)

🔼 Brent: $62.44/b (+$0.29)

🔼 WTI: $59.48/b (+$0.39)

📉 Today’s Themes:

• Optimism builds ahead of U.S.-China trade talks

• Hints of U.S. shale slowdown support prices

• OPEC+ output hike seen as priced in

• API data shows large U.S. crude stock draw

• SPR levels remain below pre-withdrawal norms

📰 Key Drivers:

🔸 Trade Talks Offer Hope

Markets are hopeful heading into U.S.-China negotiations this weekend. With tariffs soaring and sentiment shaky, any signs of easing tensions could lift global demand expectations.

🔸 US Shale May Have Peaked?

Some U.S. producers are signaling reduced capex and possible production plateauing. Analysts say this helped stabilize sentiment after prices hit four-year lows earlier in the week.

🔸 OPEC+ Hike Already Priced In

Saxo Bank’s Ole Hansen notes the recent OPEC+ move to raise output was already expected and likely priced into the market—limiting further downside, at least short term.

🔸 Mixed Inventory Data

API reported a surprise 4.5M barrel drop in U.S. commercial crude stocks. However, the SPR rose by 600,000 barrels, now at 399.1M—still far below pre-drawdown levels.

💬 Quotes of the Day:

📢 “Hopes are high with respect to trade talks.” — SEB’s Bjarne Schieldrop

📢 “The upside appears limited… OPEC+ will release barrels faster than expected.” — PVM’s Tamas Varga

📢 “It was fully priced in.” — Ole Hansen, Saxo Bank, on OPEC+ decision