Crude oil prices rebounded heading into the new week, reversing last week’s decline and posting their first weekly gain in three weeks. Over the weekend, the commodity surged by more than $1 per barrel, driven largely by encouraging U.S. employment data and the resumption of trade negotiations between the United States and China. These developments have fueled optimism about economic growth in the world’s two largest economies.
Brent crude futures closed at $66.47 per barrel, up $1.13 or 1.73%, while West Texas Intermediate (WTI) crude ended the session at $64.58, gaining $1.21 or 1.91%. Both benchmarks recorded weekly gains after two consecutive weeks of losses. Brent has climbed 2.75% so far this week, with WTI advancing 4.9%.
Phil Flynn, senior analyst at Price Futures Group, described the U.S. jobs report as “Goldilocks”—neither too hot nor too cold—suggesting it increased the likelihood of a Federal Reserve interest rate cut. According to the U.S. Labor Department’s latest monthly employment report, the unemployment rate held steady at 4.2% in May, with employers adding 139,000 jobs. Though job growth slowed compared to last year’s average of 160,000 monthly gains, the data points to a modest cooling in labor demand rather than a sharp downturn. A Fed rate cut, which President Donald Trump has advocated for, could stimulate economic growth and boost oil demand.
John Kilduff, partner at Again Capital, noted that the market had anticipated worse outcomes. “OPEC+ held the line. There have been talks between China and the U.S., though the details are sketchy, but at least they didn’t fall apart,” Kilduff said, referring to trade negotiations that have seen tensions ease slightly.
It reported that trade discussions between President Xi Jinping and President Trump occurred at Washington’s request last Thursday. Trump hailed the talks as having a “very positive conclusion,” asserting that the U.S. is “in very good shape with China and the trade deal.”
Oil markets remain volatile, reacting sharply to developments in tariff negotiations and data illustrating the economic impact of U.S. trade levies globally.
Meanwhile, OPEC+ and allied producers, including Russia, confirmed plans to increase output by a previously agreed 411,000 barrels per day (bpd) starting in July. The group dismissed a Saudi proposal for a larger hike, part of Saudi Arabia’s broader effort to reclaim market share and enforce production discipline within the coalition.
HSBC analysts noted in a recent report that the market appears balanced through the second and third quarters, as rising summer demand aligns with the planned OPEC+ supply increases.
The U.S. oil and gas rig count, a key indicator of future production, dropped by four rigs to 559 in the week ending June 6—the lowest level since November 2021—according to energy services company Baker Hughes. Oil rigs fell by nine to 442, while gas rigs increased by five to 114.
Additional upside risks to oil prices stem from geopolitical concerns, including potential U.S. sanctions on Venezuelan crude exports and possible Israeli strikes on Iranian infrastructure, according to BMI Research, a Fitch affiliate.
Despite the output increase, Saudi Arabia reduced its July crude prices for Asia to near two-month lows—a smaller cut than anticipated. The kingdom had advocated for a more significant output boost as part of its strategy to regain market share and tighten control over overproduction within OPEC+.
As global trade talks and geopolitical factors continue to unfold, oil markets remain sensitive to shifts that could influence supply and demand dynamics in the months ahead.
