Oil Prices Climb as US-China Trade Hopes Brighten: Stocks to Watch

Notable Picks

Published on NPPSC.com | May 2, 2025

Oil markets rallied Friday following China’s announcement that it is open to resuming trade talks with the United States. The prospect of easing tariffs between the world’s two largest economies has fueled optimism among investors, sparking a rise in crude prices and renewed interest in trade-sensitive U.S. stocks.

Brent crude rose 42 cents (0.7%) to $62.55 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 43 cents (0.7%) to $59.67. The jump in prices reflects hope for an uptick in global economic activity, which would boost demand for energy and industrial goods.

Why It Matters

The U.S.-China trade war has dragged on global growth and disrupted key supply chains. Any progress in negotiations is viewed as bullish for oil demand, shipping, manufacturing, and consumer confidence.

U.S. Stocks to Monitor

With oil prices reacting to trade news, several key stocks and sectors are worth watching:

Energy Sector

  • ExxonMobil (XOM) – A major player in oil production and refining. Higher oil prices directly increase its profit margins.
  • Chevron (CVX) – Another energy giant likely to benefit from sustained crude gains.
  • Occidental Petroleum (OXY) – Strong exposure to U.S. shale; more sensitive to short-term oil price fluctuations.

Oilfield Services & Equipment

  • Halliburton (HAL) – Provides drilling and exploration services. Rising oil prices often lead to more upstream investment.
  • Schlumberger (SLB) – A leader in oilfield technology and services; poised to gain from increased activity in exploration and production.

Transportation & Logistics

  • Union Pacific (UNP) – Rail transport for oil and industrial goods could benefit from improved trade flows.
  • FedEx (FDX) & UPS (UPS) – While trade volume increases are positive, these companies are sensitive to rising fuel costs which may impact profit margins.

Refining & Petrochemicals

  • Phillips 66 (PSX) – A refining company that could benefit from demand shifts, though rising crude can compress margins.
  • Marathon Petroleum (MPC) – A key player in refining and distribution, sensitive to the spread between crude and refined product prices.

Investor Takeaway

If trade talks progress, look for further upside in oil prices and a rebound in sectors hit hardest by tariff uncertainty. Energy, industrials, and tech are all poised to benefit. Keep a close eye on both diplomatic headlines and economic data over the next few weeks.

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