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Tag: Oil gains

  • Oil gains as US-China tariff pause extension boosts trade hopes

    Oil gains as US-China tariff pause extension boosts trade hopes

    Oil prices rose on Tuesday as the United States and China extended a pause on higher tariffs, easing concerns an escalation of their trade war would disrupt their economies and crimp fuel demand in the world’s two largest oil consumers.

    Brent crude futures gained 26 cents, or 0.39%, to $66.89 a barrel by 0015 GMT, while US West Texas Intermediate crude futures rose 22 cents, or 0.34%, to $64.18.

    US President Donald Trump extended a tariff truce with China by another 90 days, a White House official said on Monday, staving off triple-digit duties on Chinese goods as US retailers prepared for the critical end-of-year holiday season.

    This raised hopes that an agreement could be attained between the world’s two largest economies, and could help sidestep a virtual trade embargo between them. Tariffs risk slowing down economic growth, which could sap global fuel demand and drag oil prices lower.

    Investors are also looking ahead to a meeting between Trump and Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.

    The meeting is set amid heightened US pressure on Russia, with the threat of harsher penalties on Russian oil buyers such as China and India if no peace deal is reached that could upset oil trade flows.

    Read more: US, China extend tariff truce by 90 days, staving off surge in duties

    “Any peace deal between Russia and Ukraine would end the risk of disruption to Russian oil that has been hovering over the market,” ANZ senior commodity strategist Daniel Hynes wrote in a note.

    Trump set a deadline of last Friday for Russia to agree to peace in Ukraine or have its oil buyers face secondary sanctions, while pressing India to reduce purchases of Russian oil.

    Washington has also been pressing Beijing to stop buying Russian oil, with Trump threatening to impose secondary tariffs on China.

    The risk of those sanctions being enacted has receded ahead of the August 15 Trump-Putin meeting.

    Also on the radar is US inflation data later in the day, that could hint at the Federal Reserve’s interest rate path. Any sign that the central bank may cut rates soon would support crude prices.

  • Oil gains on short-covering, nuclear talks

    Oil gains on short-covering, nuclear talks

    Oil prices gained as US buyers covered positions ahead of the three-day Memorial Day weekend amid worries over the latest round of nuclear talks between American and Iranian negotiators.

    Brent crude futures settled at $64.78 a barrel, up 34 cents, or 0.54%. U.S. West Texas Intermediate crude futures finished at $61.53, up 33 cents, or 0.54%.

    “I think there is some short-covering going into this weekend,” said Phil Flynn, senior analyst with Price Futures Group.

    The Memorial Day weekend kicks off the US summer driving season, the period of highest demand for motor fuels.

    U.S. and Iranian negotiators met in Rome on Friday in another round of talks aimed at curtailing the Islamic Republic’s nuclear program. Traders are afraid crude supplies could be interrupted if talks fail to reach a deal, Flynn said.

    “The talks are not looking good,” he said. “If these are the last talks and there’s no deal, it could give a green light to the Israelis to attack Iran.”

    President Donald Trump said on Friday that he is recommending a straight 50% tariff on goods from the EU starting on June 1, saying the bloc has been hard to deal with on trade.

    “The oil market has been under pressure from two things,” said Andrew Lipow, president of Lipow Oil Associates. “We await the impact of tariffs on oil demand and OPEC+ is expected to increase supply again this summer.”

    OPEC+, comprising the Organization of the Petroleum Exporting Countries and allies led by Russia is holding meetings next week expected to yield another output increase of 411,000 barrels per day (bpd) for July.

    Reuters reported this month that the group could unwind the rest of its 2.2 million bpd voluntary production cut by the end of October, having already raised output targets by about 1 million bpd for April, May and June.