Oil dips but heads for weekly gain on US-China trade talks
SINGAPORE: Oil prices slipped on Friday but were on track for their first weekly gain in three weeks after U.S. President Donald Trump and Chinese leader Xi Jinping resumed trade talks, raising hopes for growth and stronger demand in the world's two largest economies.
Brent crude futures fell 11 cents, or 0.2%, to $65.23 a barrel as of 0634 GMT. U.S. West Texas Intermediate crude gave up 12 cents, also 0.2%, to $63.25, after gaining around 50 cents on Thursday.
On a weekly basis, both benchmarks were on track to settle higher after falling for two straight weeks. Brent has advanced 2.1% this week, while WTI is trading 4% higher.
China's official Xinhua news agency said trade talks between Xi and Trump took place at Washington's request. Trump said the call had led to a 'very positive conclusion,' adding the U.S. was 'in very good shape with China and the trade deal.'
Canada also continued trade talks with the U.S., with Prime Minister Mark Carney in direct contact with Trump, according to Industry Minister Melanie Joly.
The oil market continued to swing with news on tariff negotiations and data showing how trade uncertainty and the impact of the U.S. levies are flowing through into the global economy.
'The potential for increased US sanctions in Venezuela to limit crude exports and the potential for Israeli strike on Iranian infrastructure add to upside risks for prices,' analysts at BMI, a Fitch affiliate, said in a note on Friday.
'But both weaker demand for oil and increased production from both OPEC+ and non-OPEC producers will add to downside price pressures in the coming quarters.'
Top exporter Saudi Arabia cut its July crude prices for Asia to near two-month lows. That was a smaller price reduction than expected after OPEC+ agreed to ramp up output by 411,000 barrels per day in July.
The kingdom had been pushing for a bigger output hike, part of a broader strategy to win back market share and discipline over-producers in OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies including Russia.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Nepal's US trade preference at risk amid growing tariff tensions
KATHMANDU: New tariff tensions could further undermine the modest gains of least developed countries (LDCs), small island developing states (SIDS) and landlocked developing countries (LLDCs), according to a recent report. The United Nations Conference on Trade and Development, in its May publication titled 'Sparing the Vulnerable: The Cost of New Tariff Burdens', warns that these vulnerable economies could face some of the highest new US tariffs. This could lead to a decline in critical exports and pose substantial risks to their long-term development prospects. The report defines 'vulnerable economies' as LDCs, SIDS, and LLDCs—nations already struggling with structural economic and geographic disadvantages. 'US President Donald Trump is creating tariff uncertainty as a bargaining tactic in trade negotiations,' said Purushottam Ojha, a former commerce secretary. 'There is uncertainty in US tariff policy, with new tariffs being imposed, suspended, and then reinstated without predictable patterns.' Ojha noted that Nepal's trade benefits under the Nepal Trade Preference Programme are set to expire this year, potentially creating new hurdles for exporting goods to the US market. 'This tariff uncertainty increases the cost of trade, which can have a wider impact on economies that heavily rely on imports,' he said. 'The erratic US tariff policy is not a healthy sign for global trade.' The US recently increased tariffs on steel and aluminium from 25 per cent to 50 per cent and imposed 45–50 percent tariffs on products from several countries, though these have been temporarily suspended for 90 days. According to Ojha, one silver lining is that the tariff differential between Nepal and other countries has temporarily improved the competitiveness of Nepali goods. 'But with the implementation of new US tariffs still unclear, it's hard to rely on this advantage.' In the last fiscal year, Nepal recorded a trade deficit of Rs2.16 billion (US$15.8 million) with the US. According to the Department of Customs data, Nepal exported goods worth Rs17.31 billion to the US while imports totalled Rs19.48 billion. Top Nepali exports to the US included carpets, dog chew, felt goods, readymade garments for men and women, ceramic goods, pashmina, essential oils, musical instruments, handmade paper and cotton bags. Meanwhile, Nepal imported items such as soybeans, coal, oil cake, aircraft and helicopter parts, printed software manuals, artificial filament tow of cellulose acetate, laboratory and diagnostic equipment, wood pulp and almonds from the US. The US introduced the Nepal Trade Preference Programme after the April 2015 earthquake, granting duty-free access to 77 items to support economic recovery. However, trade experts say the preferential treatment has failed to significantly boost exports. The programme applies to 77 tariff lines: 56 textile products, ten footwear items, nine clothing goods and two fodder-related products. According to reports, as of Thursday (June 5), the average effective US tariff rate stands at 15.1 per cent, up sharply from the 2.5 per cent rate before the recent rounds of tariff increases. This rise results from ongoing trade disputes and retaliatory measures, contributing to a highly complex and volatile trade environment. Despite special provisions under multilateral trade rules, the participation of vulnerable economies in global trade remains minimal. They make up less than 0.5 per cent of total US imports and contribute insignificantly to US tariff revenue or trade deficits. According to the report, the least developed and landlocked developing countries account for only 1.3 per cent of global exports—a figure that has largely remained unchanged over the past three decades. This stagnation persists despite the Sustainable Development Goal (SDG) of significantly increasing the export share of developing countries, with a particular aim of doubling LDC exports by 2020. Instead, export growth for these nations has moved at a 'snail's pace' over the last 30 years, the report says. Though the US market is critical for the exports of these vulnerable economies, their footprint remains small. The report states that LDCs account for 8.9 per cent of total US exports and just 0.9 per cent of US imports. Similarly, LLDCs buy 2.1 per cent of US exports while supplying 0.2 per cent of imports. Regarding trade deficits, LDCs contribute 1.5 per cent to the US deficit, while LLDCs have a negative contribution of 0.2 per cent, meaning the US runs a trade surplus with them. The report emphasises that newly imposed US tariffs, which are layered and vary by the country, represent an added burden for these countries. Under new US tariffs announced between January and mid-May 2025, a ten per cent tariff has been applied across the board, excluding Canada, Mexico, and China. In 2023, the US imports from landlocked developing countries amounted to US$6.2 billion. Of this, 59 per cent of goods were subject to country-specific tariffs, while 41 per cent enjoyed exemptions. Imports from least developed countries stood at US$27.4 billion, with 93 per cent falling under country-specific tariffs and only seven per cent exempt. The exemptions mainly apply to primary goods such as vegetable products, footwear, foodstuffs, and headgear. The report warns that LDCs will bear the brunt of these new tariff policies. The trade-weighted average tariff the US applies to imports from LDCs is 43.9 per cent—far higher than the 7.3 per cent tariff those countries impose on US exports. For LLDCs, the US applies an average tariff of 17.1 per cent, compared to a 5.2 per cent tariff on US exports. The report concludes that shrinking preferential tariff margins threaten to erode export viability for dozens of vulnerable countries, potentially setting back years of slow but hard-earned progress in trade and development. - The Kathmandu Post/ANN
The Star
2 hours ago
- The Star
Vietnam welcomes 9.2 million international visitors in first five months
International tourists visit Hanoi. - Photo: VNA file HANOI: Vietnam welcomed 9.2 million international arrivals in the first five months of this year, marking a 21.3 per cent increase compared to the same period last year, the National Statistics Office reported on Friday (June 6). Of the total, 7.84 million visitors arrived by air, accounting for 85.2 per cent, followed by 1.18 million arrivals by road and 175,400 by sea. Asia remained the largest source market, contributing over 7.2 million visitors. European arrivals exceeded 1.2 million, while the Americas accounted for more than 496,900 visitors, followed by Oceania and Africa. According to the office, the surge in international arrivals was driven by favourable visa policies, intensified tourism promotion campaigns and celebratory activities marking major national holidays. - Xinhua
The Star
2 hours ago
- The Star
China and Myanmar commemorate 75 years of ties with emphasis on bilateral cooperation, support
Dancers perform during a celebration for the Spring Festival. The event aimed to boost China-Myanmar cultural exchange at the China Cultural Centre in Yangon, Myanmar, Jan 24, 2025. - Xinhua YANGON: The 75th anniversary of China-Myanmar diplomatic ties was marked with events in Yangon and Mandalay on Thursday (June 5), with a focus on bilateral cooperation and China's ongoing support for Myanmar. In Yangon, a commemorative event was organised to mark the anniversary alongside the International Day for Dialogue among Civilisations. Meanwhile, a forum welcoming the diplomatic milestone took place in Mandalay. Hundreds of representatives from government agencies, non-governmental organisations, businesses, think tanks and academic institutions from both China and Myanmar attended the Yangon event, highlighting the longstanding "Paukphaw" (fraternal) friendship between the two countries. Myo Aung, chief minister of Mandalay region, said in his speech at the event in Mandalay that over the past 75 years, Myanmar and China have continuously deepened cooperation in various fields such as science and technology, culture, education, sports and health. He added that Myanmar actively supports the joint implementation of major projects, including the Belt and Road Initiative, the Myanmar-China Economic Corridor and the China-Myanmar oil and gas pipeline. U Tin Oo, chairman of the Myanmar-China Friendship Association, said at the event in Yangon that China's Belt and Road Initiative has strengthened global cooperation and promoted common development. He noted that the Lancang-Mekong Cooperation mechanism has played a vital role in fostering peace, stability and development in the region. Ma Jia, Chinese ambassador to Myanmar, also addressed the event in Yangon. She said that since the establishment of diplomatic relations between China and Myanmar in 1950, bilateral relations have withstood the test of international changes and have always developed steadily. The two sides have worked hand in hand, and the people are close to each other and have helped each other, said the ambassador, adding that she hoped non-governmental organisations of both countries will continue to promote the construction of a China-Myanmar community with a shared future. Gao Ping, Chinese consul general in Mandalay, delivered a speech at the event in Mandalay, saying that no matter how the international situation changes, China has always adhered to the principles of amity, sincerity, mutual benefit, and inclusiveness. She added that China considers Myanmar as a good neighbour with blood ties, as a relative, and as a friend, and has always taken the well-being of the two peoples as the starting point and foothold for formulating policies toward Myanmar. - Xinhua
