Oil prices rose on Tuesday after U.S. President Donald Trump gave the indication that he expected to sign a trade deal with China, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling.
Brent crude was up by 27 cents, or 0.5 per cent at $58.97 a barrel after falling 1 per cent the previous session, dropping for a third day in a row.
The U.S. crude was up by 23 cents or 0.4 per cent at $$53.87 a barrel, having also dropped 1 per cent on Monday for a fourth day of declines.
U.S. President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing, settling global markets that have been roiled by new tariffs from the world’s two largest economies.
Chinese Vice Premier Liu He, who has been leading the talks with Washington, said on Monday that China was willing to resolve the trade dispute through “calm” negotiations and opposed any increase in trade tensions.
Oil prices have fallen around 20 per cent from a 2019 high reached in April, in part because of worries that the U.S.-China trade conflict is hurting the global economy, which could dent demand for oil.
China’s Commerce Ministry said last week it would impose additional tariffs of 5 per cent or 10 per cent on a total of 5,078 products originating from the United States, including crude oil, agricultural products and small aircraft.
In retaliation, Trump said he was ordering U.S. companies to look at ways to close operations in China and make products in the United States.
“Unless you believe a trade deal will happen the slowdown in the global economy continues and earnings all over the globe will be under pressure,” said Greg McKenna, strategist at McKenna Macro.
Meanwhile, U.S. crude oil and gasoline inventories likely fell last week, while distillate stockpiles rose, a preliminary Reuters poll showed on Monday.
Five analysts polled by Reuters estimated, on average, that crude inventories fell 2.1 million barrels in the week to August 23.