Oil rises amid mixed signals on US-China trade dispute

Bloomberg

Oil rose after four days of losses as President Donald Trump gave mixed signals on resolving the US-China trade dispute.
Futures in New York increased as much as 1.7 percent after falling 4.8 percent over the previous four sessions. Trump struck a more conciliatory tone at the Group of Seven meeting in France, praising the willingness of China’s top trade negotiator, Vice Premier Liu He, to find a solution to the dispute.
However, he didn’t indicate he planned to back down in the prolonged dispute.
“While deescalation and the expectation of a temporary truce in the trade war may be what is lifting sentiment and oil prices this morning, the resolution of the US-China rift will take time,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
“Economic uncertainty has not been lifted, which still leaves a fair degree of hesitancy in going long oil.”
Crude is still down about 7 percent this month as the trade war weighs on the demand outlook for oil. The dispute has yielded little progress after more than two years of steady escalation, and countered efforts by the Organization of Petroleum Exporting Countries and its allies to boost prices by cutting production.
West Texas Intermediate crude for October delivery rose as much as 93 cents to $54.57 a barrel on the New York Mercantile Exchange, and traded for $54.22. The contract settled 1 percent lower at $53.64.
Brent for October settlement gained 43 cents, or 0.7 percent, to $59.13 a barrel on the ICE Futures Europe Exchange, after retreating 1.1 percent. The global benchmark crude traded at a premium of $4.95 to WTI.
Trump said that China had “called our trade people and said let’s get back to the table.” However, on Tuesday, China’s Foreign Ministry spokesman said he was unaware of the calls, adding the US decision to add new tariffs was hurtful to both sides.
Meanwhile, Opec and its allies expect a “significant” decline in oil inventories in the second half after they cut output more than plan-ned, with their implementation of cutbacks reaching 159 percent last month.