Oil prices fell on Friday but are still on track for the first weekly profit in three weeks, after US President Donald Trump talked to his Chinese counterpart Xi Jinping this week, reinforcing hopes of a resumption to trade talks.
Brent futures fell 28 cents, or 0.4% to $65.06 a barrel, while US West Texas fell 0.6% to $63.01 a barrel.
Weekly Gains after Two Weeks of Losses
Oil prices are heading for weekly gains after two weeks of losses, with Brent up 1.8% this week, while Brent is up 3.7%.
Prices were boosted after a phone call between Trump and Jinping, with Trump describing it as “very positive”.
Canada also continued its trade talks with the US, with PM Carney in direct talks with Trump according to government sources.
However, trade uncertainty remains a negative overall for oil prices.
Fitch Ratings expect oil prices to be underpinned as the US potentially prepares to impose new sanctions on Venezuela, while Israel is gearing up for an attack against Iranian infrastructure.
However, prices are facing pressure due to weaker demand and higher production from OPEC+ members.
Saudi Reduces Prices
Saudi Arabia reduced its oil prices for Asian countries in July to two-month lows, after OPEC+ agreed to raise output by 411,000 thousand bpd in July.
Saudi Arabia has been pushing for increasing production amid a strategy to regain market share.
HSBC expects the oil market to reach a balance in the second and third quarters, as summer demand spikes in July and August, absorbing higher OPEC+ production, before the balance turns into a surplus in the fourth quarter of 2025.
