The U.S.- China trade war which has undermined the outlook for the global economy and crude demand; now with the hope that it may ease up has led to the increase in oil prices. By 950 GMT, Brent was at $59.90, which is 56 cents up around 0.9 percent increase, while U.S. oil was at $54.83 a barrel, up by 66 cents or 1.2 percent.
United States’ officials had been contacted by Beijing overnight to convey that they wanted a return of talks after which on Monday, President of the Unites States, Donald Trump stated that China was looking for a trade deal according to him.
On the other hand, a phone call between the two nations had not been heard by Geng Shuang, the Chinese Foreign ministry spokesperson.
An escalation is not coveted by Beijing according to their top negotiator Liu He, who has said that through “calm” negotiations, Beijing was willing to solve the impasse.
Products including crude oil, small aircraft, agricultural products and other amounting to a total of 5,078 products from United States were to be imposed by additional tariffs of 5 percent or 10 percent according to a statement given last week by China’s Commerce Ministry.
United States was to close operation in China and start manufacturing products in its nation itself as result of this statement given by China.
This upwards spiraling trade war between the two major nations had the oil market concerned about the “secondary global growth effect” according to Bjarne Schieldrop, a SEB analyst. China being ready to fight head on with the United States in the global space of oil was another concern for the oil market.
Interest rates in the United States may or may not have been cut soon according to the investors leading to further uncertainty amongst them.
In a almost a decade, U.S. manufacturing industries registered their first month of contraction as shown by data; which grew the concerns about a possible recession.