NEW DELHI: Oil prices climbed on Friday after China said it was open for talks with the United States on tariffs, raising hopes of a de-escalation in a bitter trade war between the world's two largest economies.
Brent crude futures rose 49 cents, or 0.8%, to $62.62 a barrel by 0446 GMT, while U.S. West Texas Intermediate crude futures added 50 cents, or 0.8%, to $59.74 a barrel.
China's Commerce Ministry said on Friday that Beijing is "evaluating" a proposal from Washington to hold talks aimed at addressing U.S. President Donald Trump's sweeping tariffs, signalling a possible easing of the trade tensions that have rattled global markets.
Concerns that the broader trade war could push the global economy into a recession and crimp oil demand, just as the OPEC+ group is preparing to raise output, have weighed heavily on oil prices in recent weeks.
"If Washington runs with it, as I expect it to, this could be a game-changer in the gloom-and-doom mood that has enveloped markets for weeks," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
"No one expects a smooth sailing for sure, but it's an encouraging breakthrough in the impasse that has been weighing on markets," Hari said.
Oil prices were also underpinned by a threat from Trump to impose secondary sanctions on buyers of Iranian oil.
Trump's comments followed a postponement of U.S. talks with Iran over its nuclear program. He had previously restored a "maximum pressure" campaign against Iran, which included efforts to drive the country's oil exports to zero, to help prevent Tehran from developing a nuclear weapon.
Oil prices had gained late in Thursday's session to settle nearly 2% higher on Trump's remarks, erasing some of the losses recorded earlier in the week on expectations of more OPEC+ supply coming to the market.
Reuters on Wednesday reported that Saudi Arabia, de facto leader of OPEC+, has briefed allies and industry experts that it is unwilling to prop up oil prices with further supply cuts.
Several OPEC+ members are set to suggest the group accelerates output hikes in June for a second consecutive month, Reuters earlier reported. Eight OPEC+ countries will meet on May 5 to decide a June output plan.
"With non-OPEC+ supply rising robustly and global demand growth facing structural decline, we see no natural re-entry point for these barrels and, ultimately, the group will likely have to endure some price pain no matter when it unwinds its cuts," Fitch's BMI research unit said in a note. - Reuters
