Oil prices rose on Tuesday after U.S. President Donald Trump predicted a trade deal with China after positive comments by Beijing, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling.
Brent crude LCOc1 was up 69 cents, or 1.2%, at $59.39 a barrel by 1110 GMT, after falling 1% in the previous session, dropping for a third day in a row.
U.S. West Texas Intermediate crude futures CLc1 were up 74 cents, or 1.4%, at $54.38, having also dropped 1% on Monday for a fourth daily decline.
Trump on Monday said he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations, settling global markets.
“While ‘de-escalation’ and the expectation of a temporary truce in the trade war may be what is lifting sentiment and oil prices this morning, the resolution of the U.S.-China trade rift will take time,” said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.
“Oil prices appear to be getting a reprieve from the past week’s U.S. and Chinese announcements of retaliatory trade measures.”
Oil prices have fallen by about 20% from 2019 highs reached in April, partly because of worries that the U.S.-China trade war is hurting the global economy, which could dent demand for oil.
China’s Commerce Ministry last week said it would impose additional tariffs of 5% or 10% on 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.
“A relative sense of calm has been restored, but it is simply impossible to know how long it will last,” said Tamas Varga of oil broker PVM.