By Alex Longley
Futures rose 1% in New York after tumbling 3.3% on Tuesday. U.S. President Donald Trump reiterated that he could impose additional duties on Beijing if he wants after agreeing to a trade-war truce with his counterpart Xi Jinping last month. Secretary of State Mike Pompeo said Iran indicated it would be open to talks if some conditions were met. U.S. inventory figures were mixed as crude stockpiles fell, but that was offset by a large rise in distillates, the American Petroleum Institute reported.
Oil has rallied since mid-June as tensions with Iran ratcheted up amid tanker attacks and seizures, prompting concerns crude flows from the Middle East may be disrupted. Still, the prospect of a further deterioration in the U.S.-China trade war is again denting the outlook for global demand, while Gulf of Mexico crude production is being restored after storm Barry.
“Crude oil has clawed back a small part of what was lost yesterday when the White House created uncertainty on both the supply and demand side,” said Ole Hansen, head of commodities strategy at Saxo Bank. “The API number from yesterday points towards a limited amount of fireworks later with focus turning to product stocks with a big jump in distillate stocks expected.”
West Texas Intermediate for August delivery rose 59 cents, or 1%, to $58.21 on the New York Mercantile Exchange as of 8:14 a.m. in New York. Brent for September settlement gained 79 cents to $65.14 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $6.79 to WTI for the same month.
Stocks fell in Asia after Trump made the tariff remarks at a cabinet meeting Tuesday. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer expect to have another call this week with top trade negotiators in China, and the two may travel to Beijing for meetings if the discussions by phone are productive, Mnuchin said Monday.
Iran’s Foreign Minister Mohammad Javad Zarif said in an interview with NBC News the “door is wide open” to negotiations if President Trump lifts sanctions he imposed on Iran’s economy in 2017. Zarif has previously said Iran wouldn’t negotiate with the U.S. under the threat of sanctions.
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