Oil prices rose on Monday morning, bouncing back from Friday’s plunge, after both the United States and China signaled de-escalation of the trade spat they had intensified at the end of last week.
At 09:09 a.m. EDT on Monday, WTI Crude was up 1.16 percent at $54.80 and Brent Crude was trading up 0.77 percent at $59.25, after the two largest economies in the world sought to appease the trade war escalation from last week.
On Friday, China and the United States traded tariff and counter-tariff announcements, with Beijing saying first that China would place tariffs on a range of U.S. products worth US$75 billion, including crude oil, in two batches starting on September 1 and on December 15. U.S. President Donald Trump retaliated with announcements of higher tariffs on Chinese products.
The escalation of the trade spat sent global markets, including the oil market, tumbling on Friday amid renewed concerned about the future of the global economy and oil demand growth.
After the weekend ended, both China and the U.S. appeared to signal willingness to avoid escalation in the dispute.
“China called last night our top trade people and said let’s get back to the table,” U.S. President Donald Trump said on the sidelines of the G7 summit in France. Related: Is China Blocking Vietnam’s Access To $2.5 Trillion In Oil & Gas?
From China, Vice Premier Liu He—the one leading the talks with the U.S.—said on Monday that Beijing wanted to reach a resolution in the trade war via “calm” talks and is firmly against the trade spat escalating.To this, President Trump praised Chinese President Xi Jinping:
“Great respect for the fact that President Xi & his Representatives want 'calm resolution.’ So impressed that they are willing to come out & state the facts so accurately. This is why he is a great leader & representing a great country. Talks are continuing!”
These signals that the world’s largest economies would look to avoid a full-blown trade war made the markets and investors a little less nervous on Monday about what’s next for the global economy and oil demand.
By Tsvetana Paraskova for Oilprice.com
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