Oil falls as investors assess US-China trade truce

Core Insights - Oil prices have decreased as investors evaluate a potential trade truce between the U.S. and China, with Brent crude futures falling to $64.50 per barrel and U.S. West Texas Intermediate crude futures dropping to $60.10 per barrel [1][2] Group 1: Trade Relations and Tariffs - President Trump has agreed to reduce tariffs on China from 57% to 47% in a one-year deal, contingent on China resuming U.S. soybean purchases and addressing the fentanyl trade [2] - Analysts view the agreement as a de-escalation of tensions rather than a significant structural change in U.S.-China relations [2] Group 2: Economic Indicators - The U.S. Federal Reserve has lowered interest rates, which is expected to support economic activity and commodities sensitive to it [3][4] - The Fed's decision reflects a shift towards gradual reflation, providing a favorable environment for commodities [4] Group 3: Oil Inventory and Market Trends - U.S. crude inventories saw a significant drop of 6.86 million barrels, reaching 416 million barrels, which was much larger than analysts' expectations [5] - Both Brent and WTI benchmarks are projected to decline over 3% in October, marking the third consecutive month of losses due to oversupply concerns [5] Group 4: OPEC+ Meeting - An upcoming OPEC+ meeting on November 2 is expected to announce an additional supply increase of 137,000 barrels per day for December [6]