TOKYO (Reuters) – Oil prices rose on Tuesday after U.S. President Donald Trump said he expected to sign a trade deal with China, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling.
FILE PHOTO: Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo
Brent crude LCOc1 was up by 27 cents, or 0.5%, at $58.97 a barrel by 0024 GMT, after falling 1% the previous session, dropping for a third day in a row.
U.S. crude CLc1 was up by 23 cents or 0.4% at $$53.87 a barrel, having also dropped 1% 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% 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% or 10% 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 Aug. 23.
Reporting by Aaron Sheldrick; editing by Richard Pullin