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China opens the door to trade talks with US

The oil prices rose on Friday, after China announced it was willing to talk with the United States about tariffs. This raised hopes for a possible de-escalation of the bitter trade war that has been raging between the two world's largest economies.

Brent crude futures increased 49 cents or 0.8% to $62.62 per barrel at 0446 GMT. U.S. West Texas Intermediate Crude futures gained 50 cents or 0.8% to $59.74 per barrel.

China's Commerce Ministry announced on Friday that Beijing was "evaluating" Washington's proposal to hold discussions aimed at addressing U.S. president Donald Trump's sweeping duties, signaling a possible ease in the trade tensions which have shaken global markets.

Oil prices have been impacted by recent concerns that the broader global trade war may push the world economy into a depression and crimp demand for oil, at the same time as OPEC+ is preparing its output increase.

"If Washington takes it up, as I anticipate, it could be a game changer in the gloom and doom mood that has engulfed markets for weeks," said Vandana, founder of oil-market analysis provider Vanda Insights.

Hari stated that "no one expected a smooth sail for sure but it is an encouraging breakthrough to the impasse which has been weighing down on markets."

Trump's threat to impose secondary sanction on Iranian oil buyers also supported the price of oil.

Trump's remarks followed the postponement by the United States of talks with Iran about its nuclear program. He had earlier restored a campaign of "maximum-pressure" against Iran. This included efforts to reduce the country's exports of oil to zero to prevent Tehran from developing nuclear weapons.

The oil prices rose late Thursday to close nearly 2% higher, erasing the earlier losses on the expectation of more OPEC+ supplies.

On Wednesday, it was reported that Saudi Arabia, the de facto leader in OPEC+ and the country that has informed allies of its refusal to further cut oil supply, had briefed industry experts and other partners.

Earlier reports said that several OPEC+ countries are planning to propose the group accelerates production increases in June for a 2nd consecutive month. On May 5, eight OPEC+ member countries will gather to determine a June production plan.

The BMI unit of Fitch said that there was no natural reentry point for the barrels. This group would have to suffer some price pain, no matter when they unwind their cuts. Reporting by Mohi Narayan from New Delhi and Shariq Khan from New York. Editing by Shri Navaratnam

(source: Reuters)