NEW YORK – Oil prices were little changed on Tuesday, hovering near their highest levels since early March after U.S. President Donald Trump soothed jangled nerves over U.S.-China trade.
Prices rose a day after Trump wrote in a tweet late Monday that the trade agreement was “fully intact”. Markets had been unsettled by surprise comments from White House trade adviser Peter Navarro who said the hard-won deal with China was “over”.
“Oil prices need a healthy relationship between the U.S. and China,” said Edward Moya, senior market analyst at OANDA in New York. He also noted that crude prices pared gains when traders were unimpressed by a U.S. purchasing managers report.
Brent futures were up 11 cents, or 0.3%, to $43.19 a barrel by 12:17 p.m. EDT (1617 GMT). Brent was on track for its second straight daily close at the highest level since prices collapsed on March 6 after the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia, failed to agree on production cuts.
U.S. West Texas Intermediate (WTI) crude rose 5 cents, or 0.1%, to $40.78. U.S. crude could close its highest since March 6 for a third straight session.
Prices pared early gains after the U.S. Purchasing Managers’ Index (PMI) showed the country’s rebound from coronavirus depressed levels was not as sharp as in Europe.
“Looking at the strength of the physical market and recovering global oil demand, we think that the crude oil price is still on its way higher,” Nordic bank SEB said in a note.
Bank of America (BofA) Global Research has lifted its oil price forecast for this year. It now expects Brent crude to average $43.70 a barrel in 2020, up from a previous estimate of $37.