Brent crude futures settle at $64.96 per barrel, up $1.05, or 1.64%.

Brent crude futures settle at $64.96 per barrel, up $1.05, or 1.64%.

Crude oil prices surged on Monday, May 13, 2025, following a breakthrough in US-China trade talks that led to a significant reduction in tariff rates. Brent crude futures settled at $64.96 per barrel, up $1.05, or 1.64%, while U.S. crude oil was up $2.52, or 4.1%, to $63.54 per barrel [1].

The agreement, reached over the weekend in Switzerland, saw the U.S. and China slash tariff rates by 115%, according to U.S. Treasury Secretary Scott Bessent. This temporary reduction, set to last for 90 days, aims to ease trade tensions between the world's two largest economies [1]. The lower tariff rates are expected to boost demand and support oil prices in the near term.

The positive sentiment around the trade talks has been a significant driver for the bullish breakout in crude oil futures. The market has set its sights on $63.06 and the 50-day moving average at $64.10, with potential for further gains of $2 to $3 per barrel [2]. The easing of US-China trade tensions has lifted crude prices by over 1%, providing a strong foundation for the current upward trend.

Optimism surrounding the trade talks has also been bolstered by the potential for a US-UK trade deal, which President Donald Trump unveiled on Thursday. The deal, which leaves a 10% tariff on UK imports, offers increased market access for American exports and reduced non-tariff barriers, further supporting global trade and oil demand [3].

On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, have agreed to increase oil output. While OPEC+ output edged lower in April due to a scheduled output hike, the overall supply is expected to rise, potentially putting downward pressure on prices [3]. However, the absence of a US-Iran nuclear deal could lead to higher prices, with Brent potentially rising above $70 per barrel [3].

In conclusion, the recent developments in US-China trade talks and the potential for a US-UK trade deal have significantly boosted crude oil prices. The temporary reduction in tariffs and the supportive market sentiment are likely to sustain the upward trend in the near term. However, the supply dynamics and potential geopolitical developments will continue to influence the market.

References:
[1] https://www.cnbc.com/2025/05/12/crude-oil-jumps-nearly-4percent-as-us-and-china-slash-tariffs.html
[2] https://www.fxempire.com/forecasts/article/oil-news-bullish-breakout-in-crude-futures-as-trade-talks-lift-market-sentiment-1517749
[3] https://aljazirahnews.com/crude-oil-prices-soar-3-over-us-china-trade-talks/