Oil prices erased earlier losses and surged on Tuesday morning after U.S. President Donald Trump said that he would meet his Chinese counterpart next week to discuss the ongoing trade dispute, lending hope to the oil market that talks will resume after weeks of stalemate.
“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” President Trump tweeted on Tuesday morning.
As of 11:20 a.m. EDT on Tuesday, WTI Crude was soaring 4.16% at $54.09, while Brent Crude prices were surging 2.72% at $62.60.
Earlier on Tuesday, oil prices were essentially flat as weak U.S. economic figures and concern over the trade war, coupled with estimates for yet another record in America’s shale production, were offsetting fears of an oil supply disruption due to increased tension in the Middle East.
In recent days, despite the escalating U.S.-Iran standoff after last week’s attacks on two oil tankers in the Gulf of Oman, oil market participants had turned their attention to signs of weakening oil demand growth and slowing economic activity in the face of a possible protracted trade war between the world’s two biggest economies.
President Trump’s tweet today, however, sent oil prices surging as the market—weary of weeks of gloomy oil demand outlooks—lapped up the news that the U.S. and China will resume the trade talks.
The high tension in the Middle East also supported the price of oil. So did a report by The Wall Street Journal, according to which Saudi Arabia is cutting its oil production even deeper this month as concerns over oil demand growth have intensified. The Saudis, OPEC’s biggest producer and de facto leader, are also asking other producers to follow and restrain production, OPEC officials told The Journal.
By Tsvetana Paraskova for Oilprice.com
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