Oil steadies as US-China trade deal hope, Russian sanctions counter demand concerns

Core Viewpoint - Oil prices remained stable due to optimism surrounding a potential U.S.-China trade deal and renewed U.S. sanctions on Russia, despite concerns about weak oil demand [1][2][3]. Group 1: Oil Prices and Market Reactions - Brent crude futures increased by approximately 14 cents, or nearly 0.2%, reaching $66.08 per barrel, while U.S. West Texas Intermediate crude futures rose by 22 cents, or 0.4%, to $61.74 [1]. - The market experienced a decline of around 1% in early trading before recovering slightly [1]. - The anticipation of a trade deal framework between the U.S. and China has positively influenced global stock markets, leading to a retreat in safe-haven assets like gold and bonds [2]. Group 2: Sanctions and Supply Dynamics - The U.S. imposed sanctions on major Russian oil companies, which could negatively impact Russia's oil exports and potentially support crude prices [3]. - Traders are cautious about the actual impact of these sanctions on global oil supplies, despite the addition of trade with China and reduced crude exports from Russia [3]. - OPEC and its allies have reversed previous production cuts to regain market share, which has contributed to stabilizing oil prices [5]. Group 3: Demand Concerns - There are ongoing concerns regarding weak oil demand, with Brent crude falling to its lowest level since May earlier this month [3]. - The recovery of U.S. consumption is seen as crucial for price stability, with analysts suggesting that a lack of recovery could lead to further price declines [4]. - Iraq's oil production negotiations and the recent fire at the Zubair oilfield did not affect exports, indicating some stability in supply from the region [5].