Oil Prices Rebound as China Signals Openness to U.S. Trade Talks
Oil prices rebounded from earlier losses on Wednesday after China hinted it may be willing to resume trade negotiations with the United States, lifting market sentiment and reversing a short-lived selloff.
Brent crude futures gained as much as 1.4%, while West Texas Intermediate (WTI) also moved higher following the news. The turnaround came after Chinese officials reportedly expressed conditional interest in renewed trade talks, prompting a shift toward risk-on sentiment across markets.
“A bit of risk-on followed,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Overall, the market seems to be settling into a bit of a wait-and-see mode.”
Beijing has reportedly requested the U.S. administration to tone down disparaging comments and appoint a credible lead negotiator backed by President Donald Trump to move talks forward. A potential agreement could be presented for signature at an upcoming high-level summit.
Trade Uncertainty Continues to Dominate
The rebound in oil comes as crude attempts to recover from earlier losses sparked by rising trade tensions. Prices had recently dropped to near four-year lows amid escalating tariff exchanges between Washington and major trading partners. On Tuesday, the White House launched an investigation into import taxes on critical minerals, signaling continued protectionist momentum.
Although the market welcomed the possibility of U.S.-China dialogue, broader concerns remain. Trade disputes with the European Union are still unresolved, with most U.S. tariffs on European goods still in place, according to administration officials.
Oversupply and Demand Worries Linger
At the same time, supply and demand fundamentals are weighing on oil prices. The International Energy Agency (IEA) on Tuesday cut its 2025 global oil demand forecast, citing weakening consumption and rising output. This is being exacerbated by larger-than-expected production boosts from OPEC+ members announced earlier in the month.
In the U.S., crude stockpiles continue to rise. The American Petroleum Institute (API) reported a 2.4 million barrel build in national inventories last week, which—if confirmed by the Energy Information Administration (EIA)—would mark the third straight weekly increase. However, the API noted declines in stockpiles at Cushing, Oklahoma, and in fuel inventories, offering a partial offset to the bearish headline figure.
Outlook
While oil’s bounce reflects optimism around renewed U.S.-China diplomacy, analysts caution that ongoing trade instability, combined with a soft demand outlook and rising inventories, could limit further gains. For now, markets appear to be taking a wait-and-see approach — hoping diplomatic momentum can outpace macroeconomic headwinds.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a "detective-like" mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
