Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
ET Markets
11,692.8530.25
Stock Analysis, IPO, Mutual Funds, Bonds & More

Oil soars 4% on hopes US-China trade talks resume, Mideast tension

US West Texas Intermediate crude futures rose $2.26, or 4.4%, to $54.19 a barrel by 11:11 a.m. EDT (1511 GMT).

Reuters|
Updated: Jun 18, 2019, 09.18 PM IST
0Comments
Agencies
oil-imports
Oil prices have fallen around 20 per cent since 2019 highs reached in April, in part due to concerns about the US-China trade war and disappointing economic data.
NEW YORK: Oil prices rose about $2 a barrel on Tuesday after U.S. President Donald Trump said he would hold an extensive meeting with Chinese President Xi Jinping at the G20 summit later this month.

Tensions in the Middle East after last week's tanker attacks, with the U.S. planning to send more troops to the Middle East, also lent support.

U.S. West Texas Intermediate crude futures rose $2.26, or 4.4%, to $54.19 a barrel by 11:11 a.m. EDT (1511 GMT). Brent crude futures rose $1.80, or 3%, to $62.74 a barrel.

"Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting," Trump tweeted.

The Chinese side has not confirmed a meeting would take place. Chinese state media said Xi agreed to the meeting and emphasized in the call that economic and trade disputes should be solved through dialogue.

"Right now, this is a rumor-driven market," said Gene McGillian, vice president of market research at Tradition Energy. "There's the expectation that if you are able to reach a trade resolution, it would help global economic growth and therefore oil demand."

Fears of a confrontation between Iran and the United States have mounted since last Thursday's oil tanker attacks, which Washington has blamed on Tehran. Iran has denied involvement.

Trump would consider using military force to prevent Iran from gaining a nuclear weapon but left open the question if it involved protecting oil supplies, he told Time magazine in an interview published on Tuesday.

Iran on Monday said it would breach internationally agreed curbs on its stock of low-enriched uranium within 10 days, adding that European nations still had time to save a landmark nuclear deal.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Market participants are also awaiting a meeting between the Organization of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, to decide whether to extend a supply reduction pact that ends this month.

OPEC and non-OPEC states are discussing holding meetings on July 10-12 in Vienna, a date range proposed by Iran, OPEC sources said on Tuesday.

Russian Energy Minister Alexander Novak said on Tuesday it was too early to make any decisions about the future of the agreement because of market uncertainties.

Oil prices have fallen by more than 15% from April's 2019 highs, partly because of concerns over the U.S.-China trade war and disappointing economic data.

High U.S. crude stockpiles, partly due to growing domestic production, has also weighed on the market. Commercial stocks were at their highest since July 2017 and about 8% above the five-year average for this time of year, according to government data last week.

After two consecutive weeks of unexpected builds, U.S. crude stocks were forecast to have dropped by 2 million barrels last week, according to analysts polled by Reuters. Industry data is due at 4:30 p.m., followed by official estimates on Wednesday.
0Comments
Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for Live Elections News & Results, Latest News in Business, Share Market & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service