Crude climbs on Middle East tension, US-China deal optimism

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Crude climbs on Middle East tension, US-China deal optimism

On Wednesday, the 19th of June 2019, both UK and US crude oil futures prices had extended gains over renewed hope of a resolution of the ten-month-long grueling trade spat between US and China, while rising tensions on Gulf following military attacks on two oil tankers last week had added to frets of further supply chain disruption.

Quoting statistics, while this report was being prepared, June 19t, GMT. 05.01, the UK Crude were up by 0.6 percent to $62.48 per barrel after gaining as much as 2 percent yesterday (June 18th). Meanwhile the US West Texas Intermediate Crude had added 0.8 percent to $54.34 a barrel after rocketing 3.8 percent at yesterday’s (June 18th) market round off.

In point of fact, later on Tuesday (June 18th), US President Donald Trump had tweeted that he had a nice conversation with Chinese President Xi Jinping over phone calls and negotiators of the two sides had been preparing to meet over the sidelines of a G20 summit due to take place between June 28th-29th at the Japanese city of Osaka.

Followed by Trump’s tweet, crude prices had begun to gather pace despite a stubborn rise in US inventories, while sending more 1000 US troops to Middle East had raised red flags over the Gulf and added to concerns of potential supply disruption through the strategically significant Strait of Hormuz.

Adding that global markets had reacted positively to Trump’s tweet, a senior market analyst at OANDA in New York, Edward Moya said, “Global demand for crude got a boost on expectations that trade talks are showing some positive signs following President Trump’s tweets”.