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Oil prices remain steady after a volatile session triggered by the uncertainty over the US-China trade deal.
Markets were alarmed by ‘surprise comments’ from White House trade adviser Peter Navarro that the hard-won US-China deal was ‘over’, Reuters reported.
However, Navarro later clarified that his comments have been taken ‘out of context’, and confirmed that the US-China trade deal remains in place.
Brent crude was down by $0.26 or 0.6% to reach at $42.82 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.38 or 0.9%, to touch at $40.35 a barrel, Reuters reported.
President Donald Trump also tweeted that the US-China trade deal was fully intact, which eased concerns in the market.
OANDA senior market analyst Edward Moya was quoted by the news agency as saying: “These comments from Navarro came out of nowhere.
“Energy traders will likely remain sceptical of the relationship between the US and China if the Chinese fail to quickly make up for the shortfall with their promises of agricultural goods (purchases).”
Trade relations between the US and China have reached their lowest point in years since the Covid-19 outbreak that began in China but hit the US hard. Beijing has often been accused by US President Trump and his administration team for not being transparent about the pandemic.
Meanwhile, on the supply front, the number of operating oil rigs in the US and Canada fell to a record low last week that ended on 19 June.
AxiCorp global markets strategist chief Stephen Innes said: “US onshore production has now given up two full years of (volume) gains.
“It supports the market supposition that even with a rebound in price, the capital investment that had already been tapering off in Q1 isn’t flowing back quickly.”