Oil Rises on Possible Trade Agreement

WTI Crude Oil

Weekly May WTI Crude Oil

Oil prices surged more than 3 percent on Tuesday as investors grew more confident the United States and China would resolve their trade dispute without damaging the global economy, while Middle East tensions and a weak dollar also supported prices.

Brent for June settlement was up $1.18 at $69.83 a barrel on the London-based ICE Futures Europe exchange, after advancing 2.3 percent on Monday.

Traders said weekly U.S. fuel supply data would give further market guidance.

The president met with military officials in the White House Monday to discuss the administration's response to an alleged chemical weapons attack carried out by Syrian President Bashar Assad 's government against its own people. Tracking the most-active futures contracts, the global benchmark marked its highest finish since December 1, 2014.

U.S. benchmark West Texas Intermediate (WTI) futures were up 1.62 per cent at $64.45 a barrel. The total count now adds up to 808, the highest level since March 2015, suggesting that the USA will be having more supply to come.

Crude oil prices have followed the equities market in recent days on concerns of a trade war erupting between the United States and China, the world's leading economies.

The United States late a year ago overtook Saudi Arabia as the world's second-biggest crude producer.

Meanwhile, news that Saudi Arabia is aiming for an $80 oil price offered further support, according to Flynn.

In a sign that oil supplies remain ample, China's Sinopec, Asia's largest refiner, plans to cut Saudi crude imports in May by 40 percent, instead buying from alternative sources, after Saudi Aramco set higher-than-expected official prices, a company official said on Monday.

OANDA's Innes said the API report had "temporarily taken a bit of wind out of the market".

Also supportive to crude prices was the weakness of the US dollar.

In the oil market, US crude inventories may have fallen by 1.4 million barrels last week, according to a Bloomberg survey before government data on Wednesday.

The oil price is up by almost 2% so far this year, thanks to healthy demand and supply restraint led by Opec, which started in 2017 to rein in oversupply and prop up prices. That would be a second week of declines after a surprise drop of 4.6 million barrels a week earlier.

The American Petroleum Institute will publish its storage data later on Tuesday.

Among refined products, May gasoline rose 2.9% to $2.041 a gallon and May heating oil added 3.4% to $2.065 a gallon.

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