Oil prices ease on trade deal, fed rate move

October 30, 2025 (MLN): Oil prices edged lower on Thursday as markets weighed the impact of a potential thaw in U.S.-China trade tensions and a recent U.S. Federal Reserve rate cut, amid persistent concerns over global supply and demand dynamics.

Brent crude futures went up by $0.43, or 0.66%, to $64.49 per barrel.

West Texas Intermediate (WTI) crude futures decreased by $0.39, or 0.64%, to $60.09 per barrel by [11:45 am] PST.

Following a meeting in South Korea, President Donald Trump agreed to reduce tariffs on Chinese imports to 47% from 57% under a one-year agreement. In return, Beijing pledged to resume U.S. soybean purchases, maintain rare earth exports, and intensify efforts to curb the illegal trade of fentanyl.

Analysts described the accord as a temporary easing of tensions rather than a fundamental shift in the bilateral relationship. “Investors view the deal as more of a de-escalation than a structural improvement,” said Tamas Varga, analyst at PVM Oil Associates, noting that the decline in Brent prices came despite significant drawdowns in U.S. crude inventories.

Adding another layer to market sentiment, the U.S. Federal Reserve lowered interest rates on Wednesday in line with expectations a move aimed at supporting economic activity.

However, the Fed hinted that it may pause further rate cuts this year, citing uncertainties stemming from the ongoing government shutdown that could disrupt data collection.

“The Fed’s decision marks a pivot toward gradual reflation and continued support for growth a stance that generally benefits commodities tied to economic performance,” commented Claudio Galimberti, chief economist at Rystad Energy.

Earlier gains in Brent and West Texas Intermediate (WTI) were also supported by a larger-than-expected drawdown in U.S. crude and fuel inventories.

According to the Energy Information Administration (EIA), U.S. crude stocks fell by 6.86 million barrels to 416m barrels during the week ended October 24, far exceeding analysts’ expectations for a modest 211,000 barrel decline, as reported by Reuters.

Despite the recent bullish inventory data, both oil benchmarks remain under pressure and are on track for losses exceeding 3% in October marking their third consecutive monthly decline due to ongoing oversupply concerns.

Investors are now turning their attention to the upcoming OPEC+ meeting on November 2, where the oil-producing alliance is expected to announce an additional 137,000 barrels per day (bpd) output increase for December, a move that could further influence market balance and price stability.

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