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Oil prices held steady on Thursday as investors assessed a potential trade truce between the United States and China after U.S. President Donald Trump lowered tariffs on China following a meeting with Chinese leader Xi Jinping in South Korea.
Brent futures rose 8 cents, or 0.1%, to settle at $65.00 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 9 cents, or 0.1%, to settle at $60.57.
Trump agreed to reduce tariffs on China to 47% from 57% in a one-year deal in exchange for Beijing resuming U.S. soybean purchases, keeping rare earths exports flowing and cracking down on the illicit fentanyl trade.
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PVM analyst Tamas Varga said investors see the announced agreement between China and the U.S. as more of a de-escalation of tension than a structural change in the relationship.
Oil majors Shell and TotalEnergies posted quarterly profit falls of 10% and 2% respectively on Thursday, dragged down by lower oil prices, though Shell beat expectations, helped by better trading results in its huge gas division.
Also helping to boost the economic outlook, the U.S. Federal Reserve lowered interest rates on Wednesday, in line with market expectations. However, it signalled that it might be the last cut of the year as the ongoing government shutdown threatens data availability. Lower interest rates reduce consumer borrowing costs and could boost economic growth and oil demand. “The Fed’s decision underscores a broader turn in its policy cycle – one that favours gradual reflation and support over restraint, providing a tailwind to commodities sensitive to economic activity,” Rystad Energy’s chief economist Claudio Galimberti said in a note.
