Trump talks help lift oil prices amid growth fears
Oil prices rose about $2 a barrel yesterday after US President Donald Trump said he would hold an extensive meeting with Chinese President Xi Jinping at the G20 summit later this month.
The move reversed an earlier drop when prices had fallen for a second day on signs that global economic growth is being hit by the US-China trade war. However, tensions in the Middle East after last week's tanker attacks, with the US planning to send more troops to the region, also lent support.
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US West Texas Intermediate crude futures rose $2.26, or 4.4pc, to $54.19 a barrel by 15.11 GMT. Brent crude futures rose $1.80, or 3pc, to $62.74 a barrel.
"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," Mr Trump tweeted.
The Chinese side has not confirmed a meeting would take place. Chinese state media said Xi agreed to the meeting and emphasised in the call that economic and trade disputes should be solved through dialogue.
"Right now, this is a rumour-driven market," said Gene McGillian, vice president of market research at Tradition Energy. "There's the expectation that if you are able to reach a trade resolution, it would help global economic growth and therefore oil demand."
Fears of a confrontation between Iran and the United States have mounted since last Thursday's oil tanker attacks, which Washington has blamed on Tehran. Iran has denied involvement.
Mr Trump would consider using military force to prevent Iran from gaining a nuclear weapon but left open the question if it involved protecting oil supplies, he told 'Time' magazine in an interview published yesterday.
Iran on Monday said it would breach internationally agreed curbs on its stock of low-enriched uranium within 10 days, adding that European nations still had time to save a landmark nuclear deal.
Acting US Defence Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.
Market participants are also awaiting a meeting between the Organisation of the Petroleum Exporting Countries and other producers including Russia, a group known as Opec+, to decide whether to extend a supply reduction.