Oil Rises as Washington and Beijing Extend Tariff Truce

SadaNews - Oil prices rose today, Tuesday, following the decision by the United States and China to extend their mutual tariff truce, which alleviated concerns about weak fuel demand in the world's two largest crude oil consumers.

Brent crude futures increased by 0.3% to reach $66.89 per barrel, while U.S. West Texas Intermediate crude futures rose by 0.36% to $64.19.

A White House official announced on Monday that U.S. President Donald Trump signed an executive order to extend the tariff truce with China for an additional 90 days, just hours before U.S. tariffs on Chinese goods were set to return to high levels.

The decision rekindled hopes for an agreement between the world's two largest economies, which could help avoid a comprehensive trade confrontation between them.

Analysts believe that imposing tariffs could lead to a slowdown in global economic growth, which might reduce fuel demand and push oil prices lower.

Investors are also awaiting a meeting between Trump and Russian President Vladimir Putin on August 15 in Alaska, to negotiate an end to the war in Ukraine.

The meeting comes amid increasing U.S. pressure on Moscow, with Washington threatening to impose stricter sanctions on buyers of Russian oil, such as China and India, if no peace agreement is reached.

Daniel Hynes, a commodity expert at ANZ Bank, stated in a research note: "Any peace agreement between Russia and Ukraine would eliminate the risk of a disruption in Russian supplies that has been looming over the market."

Last Friday, Trump set a deadline for Russia to agree to peace in Ukraine, threatening secondary sanctions on buyers of Russian oil and pressuring India to reduce its imports of Russian crude, while also exerting similar pressures on Beijing with threats of imposing secondary tariffs on it.

However, the likelihood of these sanctions being imposed has declined ahead of the upcoming meeting between Trump and Putin scheduled for August 15.

Markets are also awaiting the release of U.S. inflation data later today, which could provide insights into the Federal Reserve's direction regarding interest rates, as any indication of a potential rate cut soon could bolster crude prices.