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Oil (BZ=F, CL=F)

Oil prices rose in early European trading on Friday, ahead of trade talks between the US and China this weekend.

Brent crude futures (BZ=F) were up 0.7%, to trade at $63.28 a barrel, while West Texas Intermediate futures (CL=F) climbed 0.6%, hitting $60.25 a barrel.

The talks are due to take place in Switzerland on Saturday and Sunday. On the US side, the talks will be led by Treasury secretary Scott Bessent and chief trade negotiator Jamieson Greer, while China be represented by vice premier He Lifeng.

"[US president] Donald Trump’s hinted there may be some scope to reduce the 145% border tax on Chinese goods if discussions go well," said Derren Nathan, head of equity research at Hargreaves Lansdown. "So far, the measures haven’t done huge damage to China’s economy."

Read more: FTSE 100 LIVE: Stocks rise on trade deal optimism as Chinese exports to US slump

Data released on Friday showed that exports from China grew by 8.1% in April, which was higher than the 1.9% expected, though shipments to the US were down 21%.

"That cuts both ways with imports from America falling 4.7%, reflecting the 125% tariff imposed by Beijing," said Nathan.

A trade deal between the UK and US, which was announced on Thursday, boosted investor sentiment, with the FTSE 100 (^FTSE) opening higher on Friday morning. The pact is the first for Trump's administration since the president announced sweeping tariffs on what he dubbed "Liberation Day" on 2 April.

However, Nathan highlighted that "US relations with China aren’t quite as friendly as they are with Whitehall and there’s speculation that these negotiations could be more protracted."

He said that brent crude prices had "latched on to the potential for further trade deals, but pressures remain on the supply side as OPEC+ nations target increased production."

"Speculation is also building around a US-Iranian deal setting out rules for Tehran’s nuclear development activities which could see some oil sanctions lifted," he said. "The parties are thought to be convening in Oman this weekend."