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Oil prices recovered sharply in Asian trading on Monday, rebounding nearly 2% after steep losses in the prior session, as U.S. President Donald Trump attempted to reassure investors and ease tensions following his tariff threats against China.
By 01:58 GMT, Brent crude futures (December) were up 1.7% to $63.78 per barrel, while West Texas Intermediate (WTI) gained 1.8% to $59.95 per barrel. Both benchmarks had plunged almost 4% on Friday to five-month lows after Trump announced plans to impose an additional 100% tariff on Chinese imports, sparking fears of weaker global demand.
Trump Softens Tone on China Tariffs
Over the weekend, Trump appeared to temper his stance, writing on Truth Social: “Don’t worry about China, it will all be fine.” He added that the U.S. “wants to help China, not hurt it,” signaling potential room for negotiation and easing investor anxiety.
The remarks helped stabilize sentiment and spurred a modest rebound across commodities after last week’s selloff. Traders viewed the softer tone as a possible sign that the trade dispute could avoid further escalation, at least in the near term.
Geopolitical Tensions Ease, but Oversupply Concerns Loom
Adding to the calmer mood was news of a ceasefire agreement between Israel and Hamas, brokered by Trump, which reduced geopolitical risk in the Middle East — a key region for global oil supply. However, the ceasefire also removed some of the geopolitical premium that had supported prices in recent weeks.
Despite the rebound, analysts warned that the broader sentiment remained fragile amid concerns about an emerging supply glut. The U.S. Energy Information Administration (EIA) last week raised its 2025 crude output forecast to a record 13.53 million barrels per day, indicating continued growth in U.S. production.
Meanwhile, OPEC+ is proceeding with a gradual increase in production, having agreed earlier this month to add about 137,000 barrels per day in November — the smallest of the proposed hikes but still a signal of cautious re-expansion.
Outlook
While Monday’s rebound highlights market sensitivity to political signals, traders remain wary of potential headwinds from rising U.S. output and sluggish demand growth. The short-term outlook for crude depends largely on whether Washington and Beijing can de-escalate trade tensions and whether OPEC+ can effectively manage production increases without tipping the market back into oversupply.
