Oil prices increased by more than 1% as trade dispute between US and China is likely to be resolved without causing much damage to the global economy.
Prices, however, continue to hover around the recent levels as the global market continues to be oversupplied. Producers are under lot of pressure to keep their prices competitive to retain their share.
Brent crude futures grew 96 cents to reach $69.62 per barrel, while US West Texas Intermediate crude futures increased 89 cents to touch $64.31 a barrel, reported Reuters.
China has promised to reduce import tariffs and open its market further for trade, which seemed like striking a note of conciliation with the US.
In recent days, concerns of a trade dispute between the two giant economies and lack of certainty over maintaining a balance between supply and demand have led to fluctuating prices.
Besides trade dispute, the market is concerned about the likelihood of sanctions against some major oil producers such as Iran.
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US bank JPMorgan was quoted by the news agency as saying: “There has been a significant change in the Trump administration that has raised risks of potential sanctions on key oil exporting countries, including Iran, Venezuela and Russia.”
The American Petroleum Institute will publish its inventories data later today while the US Energy Information Administration will present its data on Wednesday.
The global oil market has received support from the output cuts by OPEC and its allies. Rising US crude production, however, has capped the prices. Since mid 2016, the crude production in the US has increased by 25% to reach 10.46 million barrels per day.
Late last year, US beat Saudi Arabia to become the second-biggest crude producer in the world. Russia topped the list with almost 11 million barrels per day.