Oil prices recovered some of the losses after plunging in the previous sessions due to the ongoing trade frictions between the US and China.
International benchmark Brent crude futures LCOc1 jumped 61 cents to $60.42 a barrel while West Texas Intermediate (WTI) crude CLc1 futures climbed 56 cents to trade at $55.25 per barrel, reported Reuters. In the last day, Brent prices dropped more than 3% over worries that the trade impasse will reduce global crude demand.
The global crude market witnessed sharp repercussions after the US President Donald Trump announced a fresh 10% tariff on Chinese imports last week.
Subsequently, China responded by allowing its currency to drop below the beyond the 7-per-dollar level. The move will make Chinese exports cheaper, but will also increase the cost of its crude imports.
OANDA senior market analyst Edward Moya was quoted by Reuters saying: “Oil prices can’t shake off falling demand concerns, as China’s latest escalation with devaluing the yuan and limiting US agricultural purchases derail hopes for a trade deal to be reached this year.
“Right now, markets are ignoring the Middle East situation, but if we see the situation in the Persian Gulf remain volatile and if US inventories extend their streak of declines, oil should see some support here.”
Earlier, Iran seized an Iraqi oil tanker alleging fuel smuggling fuelling some concerns on crude supply disruptions in the Middle-East.
Later this week, the US will publish its weekly crude oil inventory report. According to a preliminary Reuters poll, it is expected to drop for an eighth consecutive week.