Prices of oil extended its gains for a second day as trade tensions between U.S. and China eases

Oil prices

Buoyed by investors’ and analysts’ hopes that a trade dispute between U.S. and China may be resolved without denting or threatening the global economy growth: prices of oil managed to extend its gains for a second day on Tuesday.

The international benchmark: Brent crude futures manage to settled at $68.97 per barrel, which was up 0.5% or 32 cents from their previous close, while the United States West Texas Intermediate settled at $63.76 per barrel, which was up by 0.5% or 34 cents from their previous settlement. Both crude futures capped an approximate 2% gain on Monday.

However, oil prices remain within recent levels as oil markets face a abundance of supply that threatens producers to maintain their prices competitive in order not to lose market share. In accordance to this, the API is expected to publish storage data later on the day while official data from the EIA will be forecasted on Wednesday.

In addition, U.S. crude production continues to undermine the Organization of Petroleum Exporting Countries’ efforts to tighten market, as records indicated that U.S. crude supply has accelerated by a quarter since mid-2016 to 10.46 million bpd.

The positive stance of oil prices were supported by investors and analysts’ hopes towards the easing tension between Beijing and Washington, two of the world’s biggest economy. In addition, China’s President: Xi Jinping mentioned in a speech on Tuesday that the country is planning on opening China’s economy further, as well as to lower import taxes which eventually reignited hopes that the looming tension between China and the United States would soon ease.

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