Oil & Gas

Oil prices inched up on Tuesday as news broke that the United States would extend its tariff truce with China until November 10, providing a temporary relief to markets bracing for another escalation in the long-running trade conflict. Brent crude rose by 0.2% to $66.77 a barrel, while U.S. West Texas Intermediate edged up by 0.1% to $64.04. Analysts say the extension offers breathing room to both economies and raises hopes that negotiators might finally bridge the gap on a broader trade deal. Since the U.S. and China are the world’s top oil consumers, any progress that prevents economic slowdowns between them tends to lift global demand expectations and with it, oil prices.

The boost in oil was also supported by signs of cooling in the U.S. labor market, which raised the likelihood of a Federal Reserve interest rate cut in September. Lower interest rates typically encourage consumer spending and business investment, which can translate into stronger energy demand. Traders are now watching inflation data due later today for further clarity on the Fed's next move. A dovish policy stance from the central bank could offer additional support to oil, especially as markets look for stability amid trade-related volatility.

Meanwhile, geopolitical risks remain in play, with a high-profile meeting between U.S. President Donald Trump and Russian President Vladimir Putin scheduled for August 15 in Alaska. While the focus will be on ending the war in Ukraine, the talks could also influence oil flows if new sanctions or the easing of existing ones are announced. However, in the immediate term, it is the thawing of U.S.-China trade tensions that has shifted market sentiment, offering a more optimistic outlook for global trade, economic growth, and oil demand heading into the final quarter of the year.