Oil prices fell this morning amid uncertainty over the first phase of a trade deal between the US and China.
Markets were lifted two per cent by optimism over a thaw in the frosty relations by the end of last week, but Brent Crude was down 1.11 per cent this morning, valued at $59.84 per barrel.
US West Texas Intermediate was at $54.15 per barrel, down 1.01 per cent.
OANDA analyst Edward Moya said: “Oil is slowly giving up its recent gains as mini-trade deal scepticism is growing.”
“Since it will take about a month to finalize this partial deal, traders are remembering that we have seen things fall apart in shorter time periods.”
The emergence of the first phase of a trade deal between the US and China, as well as a good will move by Washington to suspend threatened tariffs on Chinese products had initially lifted global financial markets on Monday.
But investors remained cautious given that few details emerged from the talks.
“This appears to be similar to past trade talks where the situation appeared rosy, before eventually crumbling down again,” Phillip Futures said in a note.
Both Brent and WTI futures rose more than three per cent last week.
A good portion of those gains came on Friday, after an Iranian oil tanker was attacked off Saudi Arabia’s coast in the Red Sea.
Investigators are trying to establish whether the tanker was hit by missiles, which could ratchet up tensions between Tehran and Riyadh if confirmed.
There are also concerns that further escalation along the Syrian and Turkish border could impact output or exports from Iraq.