Oil prices appreciated on Tuesday, but remained under pressure as the escalating U.S.-China trade war stoked concerns over global economic growth and future demand for crude.
Brent crude futures had risen 10 cents, or 0.17 per cent, to $59.91 a barrel after earlier dipping to their lowest since mid-January at $59.07.
The international benchmark fell more than 3 per cent on Monday as traders worried the ongoing trade tensions between the world’s two biggest oil buyers would dent appetite for fuel.
West Texas Intermediate (WTI) crude futures rose 7 cents, or 0.13 per cent, to $54.76 per barrel.
A year long U.S.-China trade war boiled over as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade.
“Oil prices can’t shake off falling demand concerns, as China’s latest escalation with devaluing the yuan and limiting U.S. agricultural purchases derail hopes for a trade deal to be reached this year,” said Edward Moya, senior market analyst at OANDA in New York.
“Right now markets are ignoring the Middle East situation, but if we see the situation in the Persian Gulf remain volatile and if U.S. inventories extend their streak of declines, oil should see some support here,” Moya added.
Iran will no longer tolerate “maritime offences” in the Strait of Hormuz, its foreign minister said on Monday, a day after it seized a second oil tanker near the strategic waterway that it accused of smuggling fuel.
Iran’s seizure of the Iraqi oil tanker had raised some concerns about potential Middle East supply disruptions in the Gulf.
Concerns that the trade conflict has entered a phase of retaliatory action was weighing down on the sentiments in the oil market, which at the moment is taking lesser notice of the Middle East tensions, analysts said.
Oil prices might get some respite later in the day as a preliminary Reuters poll showed U.S. crude oil inventories were expected to be down for an eighth consecutive week.
The poll was conducted ahead of reports from the American Petroleum Institute, (API), an industry group, which is scheduled to release its data for the latest week today.