Oil prices rise as China says it’s open for trade talks with US

Oil prices pulled ahead in early Asian hours on Friday after China said its door is open for talks with the United States, raising hopes of a de-escalation in a bitter trade war between the world’s two largest economies.

Brent crude futures rose 38 cents, or 0.6 per cent, to $62.51 a barrel by 0136 GMT, while US West Texas Intermediate crude futures added 38 cents, or 0.6 per cent to $59.62 a barrel.

China’s commerce ministry on Friday said the United States has recently taken steps to open a dialogue with Beijing by conveying information through relevant parties.

Concerns that the broader trade war could push the global economy into a recession and crimp oil demand, just as the OPEC group is preparing to raise output, have weighed heavily on oil prices in recent weeks.okay

However, the signals of a potential easing in trade tensions between the United State and China, the world’s biggest importer of crude oil, supported sentiment towards crude.

Oil prices were also underpinned by a threat from US President Donald Trump to impose secondary sanctions on buyers of Iranian oil.

The threat raised fears of tighter crude oil supplies, ANZ bank analysts said in a note.

Trump’s comments followed a postponement of US talks with Iran over its nuclear program. He had previously restored a “maximum pressure” campaign against Iran, which included efforts to drive the country’s oil exports to zero, to help prevent Tehran from developing a nuclear weapon.

Oil prices had gained late in Thursday’s session to settle nearly 2 per cent  higher on Trump’s remarks, erasing some of the losses recorded earlier in the week on expectations of more OPEC supply coming to the market.

Reuters on Wednesday reported that Saudi Arabia, de facto leader of OPEC, has briefed allies and industry experts that it is unwilling to prop up oil prices with further supply cuts.

Several OPEC members are set to suggest the group accelerates output hikes in June for a second consecutive month, Reuters earlier reported.

Eight OPEC countries will meet on May 5 to decide a June output plan.

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