Oil prices climb as trade-war tensions recede

Reuters: Oil prices rise on hopes US trade spat with China may ease

Oil markets rose for a second day on Tuesday on hopes that a trade dispute between the United States and China, the world's two biggest crude consumers, may be resolved without greater damage to the global economy, Reuters reports.

President Xi Jinping on Tuesday promised to open China's economy further and lower import tariffs, striking a conciliatory tone on the trade tensions between his country and the United States.

In physical oil markets, OPEC's number two producer Iraq said on Monday that it is keeping prices for its crude supplies in May steady.

U.S. WTI crude for May delivery now +2.5% at $64.99/bbl and June Brent crude +2.4% at $70.32/bbl.

Brent crude futures LCOc1 jumped $2.39, or 3.5 percent, to settle at $71.04 a barrel.

"There are headlines of a US carrier group heading to the Middle East, the Saudis are looking for $80 Brent crude, and this is ahead of API inventories", said Roberto Friedlander, head of energy trading at Seaport Global Securities.

Analysts said Xi's comments greatly relieved market anxiety for a potential trade war between the world's two largest economies.

The American Petroleum Institute will publish its storage data later on Tuesday.




U.S. WTI crude futures CLc1 were at $65.40 a barrel, down 11 cents, or 0.2 percent from their last settlement.

Both equity and oil markets rallied after the speech, while supposed safe havens such as U.S. Treasurys and gold slipped, supporting Wall Street's thesis that a trade war between the economic superpowers is increasingly unlikely.

Analysts and traders have recently warned that booming US shale oil production could potentially derail OPEC's effort to end a supply glut.

Monthly oil reports are also due out from the Organization of the Petroleum Exporting Countries on Thursday and the International Energy Agency on Friday.

However, soaring U.S. crude production C-OUT-T-EIA, which has jumped by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is threatening to undermine OPEC's efforts to tighten the market and prop up prices.

Oil prices overall remain optimistic due to strong demand, as well as the supply curb by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation.

The U.S. late past year overtook Saudi Arabia as the world's second-biggest crude producer.

That will likely make the United States the world's biggest oil producer by 2019, surpassing Russian Federation which now pumps out nearly 11 million bpd.

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