US WTI prices have increased after four weeks of decline, but gains were capped due to the fallout from trade tensions between the US and China.
Benchmark Brent crude futures went up 13 cents, or 0.2%, to reach $74.42 a barrel after increasing 1.7% last week, while WTI crude futures climbed 31 cents, or 0.5%, to $69, Reuters reported.
Trade tensions between the US and the EU eased after President Donald Trump made some changes to his tariff imposition drive on imports into the country from the EU. The dispute with Beijing continues to intensify, further pushing up WTI prices.
Brokerage Oanda APAC trading head Stephen Innes was quoted as saying: “Oil prices could struggle this week. Concerns around the US-China trade wars continue to weigh on prices, while the halt in Saudi shipments through the Red Sea waterway has seemingly failed to provide a bullish fillip.”
Last week, Saudi Arabia stated that it was temporarily halting crude oil shipments through a key shipping channel in the Red Sea, following an attack on two ships by Yemen’s Iran-aligned Houthis.
Meanwhile, increased drilling activity was observed in the US, with energy firms adding three oil rigs towards the end of last week.
Volatility in the oil markets has led to hedge funds reducing their bullish wagers on US crude for the second week running.
Data released by the US Commodity Futures Trading Commission indicated that the speculator group cut its combined futures and options position in New York and London by 11,362 contracts to 412,289 last week.