Oil prices slipped on Monday as renewed concerns over ample global supply overshadowed optimism surrounding progress in US-China trade negotiations.
Brent crude oil futures fell to $65.40 per barrel, reversing earlier gains that followed news of a possible trade breakthrough between Washington and Beijing.
US Treasury Secretary Scott Bessent said he had reached a “substantial framework” with Chinese Vice Premier He Lifeng, covering key areas such as export controls, tariff suspensions, agricultural trade, and fentanyl-related measures. The agreement is expected to be discussed further when the two leaders meet later this week.
While the talks lifted hopes of improved global trade sentiment, those gains were capped by ongoing worries about oversupply in the oil market.
The International Energy Agency (IEA) warned that global production is likely to remain in surplus, driven by growing output from what it calls the “American quintet”, the United States, Canada, Brazil, Guyana, and Argentina.
Meanwhile, support for prices came from lingering concerns over Russian supply disruptions following new US sanctions imposed on Rosneft and Lukoil, which together account for nearly half of Russia’s daily oil output.
Despite this, analysts said the broader market outlook remains tilted towards oversupply as rising production continues to outpace demand growth.
