WASHINGTON (dpa-AFX) - Oil ticked lower on Monday after rallying almost 8 percent last week on supply jitters.
Benchmark Brent crude futures fell 1.2 percent to $64.42 a barrel in European trading, reversing earlier gains on concerns about rising global supplies. WTI crude futures were down 1.2 percent at $60.77.
While progress between the United States and China on trade boosted the outlook for energy demand, there are downside risks for oil in the coming months, particularly from higher supply.
Oil prices had initially risen in Asian trading after U.S. Treasury Secretary Scott Bessent said President Trump's threat of 100 percent tariffs on Chinese goods 'is effectively off the table' and that he expects the Asian nation to make 'substantial' soybean purchases as well as offer a deferral on sweeping rare earth controls.
After two days of talks in Malaysia, a Chinese official said the two sides reached a preliminary consensus on topics including export controls, fentanyl and shipping levies.
On the supply side, the International Energy Agency (IEA) expects the oil market to remain oversupplied in 2026, with production from the so-called 'American quintet', the U.S., Canada, Brazil, Guyana, and Argentina, outpacing demand growth.
China, the world's largest oil importer, was also seen steadily building out its oil reserves in recent months, adding to concerns over strong oil supplies.
Last week, Sinopec, China's largest oil refiner, announced the discovery of a new shale oil reserve estimated at 100 million tons in Sichuan Basin in southwest China, which could help further the country's attempts at energy independence.
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