Oil prices rebounded on Wednesday morning, driven by renewed optimism surrounding US-China trade negotiations and heightened geopolitical tensions between India and Pakistan. The recovery followed a recent dip to near four-year lows earlier in the week.
Brent crude futures climbed to $62.88 per barrel as of 07:11 GMT, reflecting a 1.17% increase from the previous close. Meanwhile, West Texas Intermediate (WTI) futures saw a 1.40% rise, reaching $59.92 per barrel.
Key Drivers:
- US-China Trade Talk Optimism: Recent developments have sparked hopes that the United States and China may resume negotiations aimed at resolving ongoing trade disputes. The possibility of economic cooperation between the two largest global economies is seen as a catalyst for stabilizing demand forecasts in the oil market.
- India-Pakistan Tensions: Growing concerns over military escalations between India and Pakistan are also contributing to the upward pressure on oil prices. Market analysts note that geopolitical instability in South Asia could disrupt energy trade routes, prompting speculative buying.
- Supply Adjustments and OPEC Policies: In addition to geopolitical factors, OPEC’s continued commitment to production cuts remains a pillar of support for global oil prices. The organization’s strategic decisions are being closely monitored as markets assess the impact of potential supply restrictions.
Energy experts predict that if US-China trade talks move forward positively, oil prices could stabilize further, potentially recovering losses from earlier in the year. However, ongoing conflict in South Asia and fluctuating market sentiment continue to pose risks.
