Crude oil prices fluctuated but managed a modest rebound, buoyed by renewed optimism over upcoming trade negotiations between the U.S. and China.

Market sentiment received a boost after news broke that U.S. Treasury Secretary Scott Bessent is set to meet with China’s top economic official in Switzerland. Traders are hopeful the discussions might ease long-standing trade tensions between the world’s two largest oil consumers.

While President Donald Trump cautioned that the talks are still in their early stages and reaffirmed his tough stance on tariffs, any positive outcome could lend additional support to oil prices.

However, the rally remains fragile due to ongoing concerns about weakening demand. The U.S. Federal Reserve’s decision to keep interest rates unchanged—while highlighting rising economic uncertainties—has added to investor caution.

Further dampening sentiment is a rise in U.S. gasoline stockpiles, which has sparked fears of sluggish demand as the summer driving season approaches.

On the supply side, anticipated output increases from OPEC and its allies are expected to exert downward pressure, posing further challenges to sustained price growth.