Oil Weakens Even As China and the United States Calm Trade Tensions

09:08 AM EDT, 10/30/2025 (MT Newswires) -- Oil prices fell early on Thursday despite optimism for recovering global growth after the United States and China reached a trade deal and the Federal Reserve lowered interest rates.

West Texas Intermediate crude oil for December delivery was last seen down US$0.59 to US$59.89 per barrel, while December Brent crude was down US$0.66 to US$64.26.

U.S. President Donald Trump and Xi Jinping, his Chinese counterpart, met in South Korea on Thursday and agreed to a one-year trade deal. The meeting ended with Trump promising to reduce tariffs on Chinese imports by 10% to 47%, while Xi agreed to relax export controls on rare earth minerals and resume purchases of U.S. soybeans.

"Within the framework of a one-year trade agreement, the US has reportedly reduced punitive import tariffs in exchange for China resuming soybean imports, lifting rare earth export controls and cracking down on fentanyl shipments. Details are still emerging at the time of writing, but given the tepid market reaction, the deal seems more like an immediate de-escalation in tension than a structural change in trade relationship," PVM Oil Associates wrote.

The agreement follows on Wednesday's 25 basis point cut to U.S. interest rates as the Federal Reserve looks to boost economic growth slowed by Trump's capricious trade policies. It also follows on a day-prior report from the Energy Information Administration showing U.S. oil inventories last week fell by a more than expected 6.9-million barrels last week, easing concerns supply is rising above demand.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.