By Anjana Anil
(Reuters) -Oil prices rose on Tuesday as early signs of a thaw in U.S.-China trade tensions bolstered market sentiment, alleviating concerns over global fuel demand.
U.S. Treasury Secretary Scott Bessent said on Monday President Donald Trump remains committed to meeting Chinese President Xi Jinping in South Korea later this month as both countries try to de-escalate tensions over tariff threats and export controls.
He added that there were substantial communications between the two sides
over the weekend and more meetings were expected.
Brent crude futures rose 18 cents, or 0.28%, to $63.50 a barrel by 0000 GMT, while U.S. West Texas Intermediate crude was at $59.65 a barrel, up 16 cents, or 0.27%.
In the previous session, Brent settled 0.9% higher, and U.S. WTI closed up 1%.
The prospect of improved trade relations between the world's two largest economies has historically buoyed oil markets, as investors anticipate stronger global growth and increased fuel demand.
However, recent developments, including Beijing's expanded export controls on rare earths and Trump's threats of 100% tariffs and software export restrictions starting November 1, have weighed on sentiment. Last week, oil prices posted weekly losses and touched their lowest levels since May.
Trump had also cast doubt on a potential meeting with Xi during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea scheduled for October 30-November 1, saying on Truth Social that "now there seems to be no reason to do so."
While the selloff in markets now looks to be limited by Washington and Beijing's more conciliatory tone, geopolitics are expected to remain in the spotlight.
"The oil industry continues to navigate geopolitical issues," Daniel Hynes, an analyst at ANZ, said in a note.
"China announced that it would levy U.S.-owned ships arriving at its shores, including oil tankers. That sparked several last-minute cancellations and a jump in shipping rates," Hynes added.
Limiting the market's upside, Trump on Monday declared the end of the two-year-long Gaza war that has upended the broader Middle East.
Meanwhile, the Organization of the Petroleum Exporting Countries and allies including Russia said in its monthly report on Monday that the oil market's supply shortfall will shrink in 2026, as the wider OPEC+ alliance moves ahead with planned output increases.
(Reporting by Anjana Anil in Bengaluru; Editing by Jacqueline Wong)
