Oil prices recovered from early losses on Monday as optimism over a trade deal framework between the US and China countered concerns about weak demand for crude.
Brent crude futures were down 14 cents, or nearly 0.2%, to $65.70 a barrel at 1227 GMT. US West Texas Intermediate crude futures were down 9 cents or 0.2%, to $61.41. Both contracts fell around 1% in early trade, Reuters re
US Treasury Secretary Scott Bessent said on Sunday US and Chinese officials had hashed out a "substantial framework" for a trade deal that could avoid 100% US tariffs on Chinese goods and achieve a deferral of China's rare-earth export controls in trade discussions this week.
This boosted global stocks on Monday, while safe-haven gold and bonds retreated, along with oil.
DEMAND CONCERNS WEIGH ON OIL
"Oil market participants are much more sceptical of trade deals than their equity counterparts. A bright negotiating atmosphere does not immediately mean demand," said PVM Oil Associates analyst John Evans.
Concerns over lacklustre demand have weighed on the market, with Brent falling to its lowest since May earlier this month, but renewed sanctions on Russia from the US along with stronger-than-expected US demand have helped buoy prices.
"The hope for bulls is that US consumption continues to recover, otherwise it seems the drift lower seen so far today is likely to intensify," said Chris Beauchamp, chief market analyst at IG Bank.
Meanwhile Iraq, the OPEC group's biggest overproducer, was in negotiations over the size of its quota within its available capacity of 5.5 million barrels per day, oil minister Hayan Abdel-Ghani said at an oil conference on Monday.
OPEC and its allies have changed course this year by reversing previous production cuts to regain market share, helping in part to keep a lid on oil prices.
The fire at Iraq's Zubair oilfield on Sunday did not impact exports from the country, the country's oil minister added.
Last week, Brent and WTI rose 8.9% and 7.7%, respectively, on US and EU sanctions on Russia.
"There are likely some continued challenges for Russian oil to enter the market, but it depends on how sanctions will be enforced," said Rystad analyst Janiv Shah.
