Oil prices have fallen on Tuesday, driven by growing optimism over a temporary pause in the US-China trade war and mounting concerns about a global supply glut.
International benchmark Brent crude decreased by around 0.1%, trading at $64.69 per barrel at 10 a.m. local time (0700 GMT), down from $64.78 at the previous session's close.
The US Benchmark West Texas Intermediate decreased by about 0.09%, settling at $61.57 per barrel, compared to its prior session close of $61.63.
The shift follows a breakthrough in trade talks held over the weekend in Switzerland, where Washington and Beijing agreed to roll back tariffs for a 90 day period.
As part of the deal, from 14 May, the US will reduce duties on Chinese imports from 145% to 30%, while China will cut tariffs on American goods from 125% to 10%.
Speaking at a press conference at the White House, President Donald Trump said that the Geneva negotiations had paved the way for a 'fresh start' with China. He also noted that Beijing had agreed to suspend and ultimately remove all non-monetary trade barriers.
China's Ministry of Commerce echoed the sentiment, describing the talks as a 'critical step' in narrowing differences and deepening cooperation.
Trump also commented on the upcoming Russia-Ukraine negotiations in Türkiye, saying he was hopeful about the outcome, adding he could change his plans and fly to Istanbul if necessary. 'I don't know where I'm going to be at that particular point, I'll be someplace in the Middle East. But I would, if I thought it would be helpful,' Trump said.
Analysts say the easing of trade tensions has helped relieve pressure on global trade flows, contributing to the recent dip in oil prices.
Meanwhile, oil markets have also been rattled by moves from the OPEC+ alliance. Last week, eight members of the oil producing bloc, which includes both OPEC and non-OPEC nations, announced plans to accelerate output increases.
The decision sent crude prices to their lowest levels since February 2021, fueling fears of an oversupplied market.
The announced increase was roughly triple the amount previously projected by OPEC+, with key producers such as Saudi Arabia and Russia pledging to ramp up production.
Experts say the move signals a significant uptick in global oil supply in the months ahead, with the potential to weigh further on prices and offset any disruptions from the Middle East.
Markets are also closely watching for April's Consumer Price Index (CPI) data due later today, which is expected to shed further light on the direction of the US economy.
In its latest policy statement, the US Federal Reserve (Fed) warned of rising risks tied to inflation and unemployment. Fed Chair Jerome Powell cautioned that tariff related pressures could lead to both higher inflation and job losses, potentially slowing economic growth.
Economists say the upcoming inflation data could prove pivotal. A stronger than expected reading may prompt the Fed to pause its cycle of interest rate cuts a move that could in turn exert additional downward pressure on oil prices.
By Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr