Oil extended gains as the market turned its attention to trade talks between the US and China this weekend, after President Donald Trump announced an agreement with the UK.

Brent climbed toward $64 a barrel, following a 2.8% gain in the previous session. The Trump administration is weighing a dramatic reduction of tariffs on China to de-escalate tensions and temper the economic pain both countries are already starting to feel.

Crude has tumbled from a mid-January peak on concerns tariffs will dent economic growth, while OPEC+ moved to revive idled production. Measured optimism on trade negotiations has helped prices recover some ground after starting the week near their lowest since 2021.

“There is renewed trade optimism across financial markets, including oil, following yesterday’s signing of the first UK–US trade agreement,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “There is strong support for oil prices in the $60–$64 range.”

Still, while the US president hailed the pact with the UK as historic, specifics of the deal indicated it fell short of the “full and comprehensive” agreement he had promised. And even though Trump said negotiations with China would result in tangible progress, Beijing reiterated on Thursday its call for the US to cancel tariffs ahead of talks.

Source: Financeyahoo