Oil Prices Rise As China, U.S. Put Trade War On Hold

Investing.com – Oil prices rose on Monday morning in Asia, boosted by news that China and the U.S. have put a looming trade war “on hold”.

 for June delivery were trading at $71.90 a barrel at 11:10PM ET (03:10 GMT), up 0.74%. for July delivery, traded in London, were also up 0.74% at $79.09 per barrel.

The trade war between the world’s two biggest economies is “on hold” after they agreed to drop their tariff threats while they work on a wider trade agreement, according to U.S. Treasury Secretary Steven Mnuchin on Sunday.

The news gave global markets a lift in early trading on Monday. Brent crude crept ever closer to $80 per barrel, a level it has not seen since November 2014, as supplies tightened while demand remained strong.

Traders expect the trade dispute to de-escalate over time through negotiation. However, geopolitical risks continue to prop up prices. Markets remain on edge due to looming U.S. sanctions against Iran that may cause shortages in oil supplies later this year when trade restrictions take effect. Iran currently produces 4% of global oil supplies.

Meanwhile, production in Venezuela plunged to 1.5 million barrels last month, its lowest level in decades due to its ongoing economic crisis.

Oil prices have surged more than 70% over the last year as demand has risen sharply while production has been restricted by the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and other producers, including Russia.

On the other hand, U.S. crude is increasingly appearing on global markets as a result of its surging production. The U.S. oil rig count, an early indicator of future output, is at 844, the highest level since March 2015.

Meanwhile, for September delivery were down 0.27% at 483.50 yuan ($75.63) per barrel on Monday at 11:10PM ET (03:10 GMT).

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