Crude Oil Inches Higher After Trump Changes Tone On China

(RTTNews) - Crude oil has risen on Friday after U.S. President Donald Trump suddenly reversed his hardline stance on China, triggering confidence warmer bilateral trade relations could lead to an increase in energy demand.

WTI Crude Oil for November delivery was last seen trading up by $0.20 (or 0.35%) at $57.66 per barrel.

The U.S. and China are the largest economies in the world and for the past four to five months, negotiations to end the "tariff war" were on track.

Last week, trade tensions renewed between the U.S. and China as China's export curbs on its rare earth minerals angered U.S. President Donald Trump, who announced new 100% tariffs on Chinese exports to the U.S. This triggered concerns of a possible slowdown by the economy and low demand for energy.

Trump had previously indicated he would not Chinese President Xi Jinping in South Korea later this month as previously planned.

However, in an interview to Fox Business that aired today, Trump surprisingly struck a different note by sounding pragmatic when he maintained that the 100% tariffs were not sustainable. He also confirmed meeting Xi as scheduled and went on to express admiration for him.

Trump's change in tone pushed markets to foresee smoother U.S.-China bilateral trade ties and thereby increasing energy demand.

The Gaza Peace Plan proposed by Trump is now almost a done deal. The exchange of prisoners and captives by Israel and Hamas are now complete. With the ceasefire in place, so far, no adverse events have been reported. The geopolitical risk premium that existed earlier is now out.

After brokering a successful peace deal in the Middle East, Trump has set his sights on bringing the drawn-out Russia-Ukraine war to an end.

Yesterday, Trump announced that he will meet Russian President Vladimir Putin in the next 2-3 weeks in Budapest, Hungary, along with "high-level delegations" to discuss ways to end the conflict. This raises the likelihood of more Russian oil flowing into the market.

Yesterday, data released by the U.S. Energy Information Administration revealed that for the week ending October 10, crude oil inventories rose by 3.524 million barrels. Economists had expected crude oil inventories to inch up by 0.1 million barrels.

At 423.8 million barrels, U.S. crude oil inventories remain about 4% below the five-year average for this time of year.

For the same period, gasoline inventories declined by 267,000 barrels, distillate inventories decreased to 4529,000 barrels, and heating oil inventories fell by 519,000 barrels.

In addition, the data indicated a rise in U.S. production to 13.636 million barrels per day.

Baker Hughes Company reported today that in the U.S., for the week ending October 17, crude oil rigs remained unchanged at 418 from the previous week and total rigs increased to 548 from 547 from the previous week.

In its recent monthly oil market report, the OPEC alliance kept its global oil demand growth forecasts largely unchanged at 1.3 million barrels per day and 1.4 million barrels per day for 2025 and 2026, respectively. Similarly, the group also maintained its supply projections and expects those from producers outside the wider OPEC+ alliance to rise by 810,000 barrels per day in 2025 and 630,000 barrels per day in 2026.

In the U.S., the government shutdown has entered day number 17.

U.S. Federal Reserve Chair Jerome Powell this week acknowledged the sharp slowdown in hiring and indicated the need to end quantitative tightening.

Even with the absence of key official economic releases, expectations are running high among traders over the U.S central bank's rate cuts.