Morning Highlights: Oil on Track for Weekly Gains Before US-China Trade Discussions

Market Snapshot (as of 06:15 EST):

🔺 Brent: $63.99/b (+$1.15)

🔺 WTI: $61.08/b (+$1.17)

📈 Weekly change: Brent +4%, WTI +4.1%

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📉 Today’s Market Themes:

• Brent and WTI eye ~4% weekly gains on easing trade tensions

• Breakthrough U.S.-UK trade deal boosts risk appetite

• U.S.-China meeting set for May 10 in Switzerland

• Kazakhstan continues to overproduce, challenging OPEC+ unity

• U.S. NGL exports hit record highs despite China pullback

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Key Drivers:

🔸 Trade Thaw Lifts Sentiment

Oil prices climbed on hopes that upcoming U.S.-China trade talks may ease the tariff war that has clouded global growth and oil demand. Brent rose over $1 and WTI saw its second straight daily gain. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will meet in Switzerland on May 10 to begin resetting trade relations.

“If they agree to de-escalate while talks continue, crude could stack on another $2 to $3 per barrel,” said Vandana Hari of Vanda Insights.

Meanwhile, the UK announced a "breakthrough" bilateral trade agreement with the U.S., signaling momentum toward broader global cooperation—another bullish signal for oil.

🔸 Positive Chinese Data Ahead of Talks

April trade data showed Chinese exports beating expectations, with imports narrowing their decline. That data—combined with hopes for a policy shift—provided further support to the oil rally.

🔸 OPEC+ Discord: Kazakhstan in Focus

Kazakhstan, already under scrutiny for repeated overproduction, plans to keep its May output flat at record highs. In March, it produced 2.17 million bpd of crude and condensate, exceeding its OPEC+ quota of 1.468 million bpd for crude.

The May OPEC+ decision to accelerate output hikes was interpreted by analysts as a warning shot from Saudi Arabia to overproducing members like Kazakhstan and Iraq.

"The second straight hike sends a clear message: Riyadh won’t tolerate quota violations while others play by the rules,” said a senior OPEC+ source.

🔸 U.S. NGL Exports Defy Trade War Worries

Despite the tariff standoff, U.S. exports of natural gas liquids hit an all-time high in April at 2.9 million bpd, according to Kpler and Vortexa.

• China imports down 35% MoM

• India tripled imports to 179,000 bpd

• Brazil doubled to 113,000 bpd

• Japan boosted shipments 64% to nearly 400,000 bpd

Producers like Enterprise Products Partners and Energy Transfer reported no disruption to ethane, propane, or butane flows, with both logging transport and export gains in Q1.

"When it comes to gas liquids, nobody cares about the trade drama—they just want the product," one U.S. exporter told Reuters.