Global oil prices pushed higher this morning after US president Donald Trump soothed traders’ nerves by assuring the market that his long-sought trade deal with China was intact.
The previous session had seen the market suffer a bout of jitters after White House trade adviser Peter Navarro said that the hard-fought deal was “over”.
However, after the president’s assurances, worldwide standard Brent crude picked up 1.6 per cent to rise to $43.77 a barrel.
US benchmark West Texas Intermediate (WTI) followed suit, gaining 1.7 per cent to hit $41.42.
Heightened tensions between the world’s two largest economies during the coronavirus pandemic have caused concerns that the future of the trade deal, agreed in January, could be in jeopardy.
Trump has repeatedly lambasted Beijing for its lack of transparency over the virus, claims which the Chinese authorities have dismissed.
As yet, however, the deal remains intact, prompting prices to continue their comeback from April’s historic lows.
Last week, an agreement from the Opec+ alliance of oil producing states to increase compliance with record 9.7m barrel per day cuts also bolstered prices.
And increasing demand as businesses emerge from coronavirus lockdowns has prompted prices to increase further.
Rystad Energy’s head of oil markets Bjornar Tonhaugen said: “Markets got a scare yesterday from something not even remotely on trader’s minds: The US-China trade deal.
“Statements that shook the market proved to be no news and Brent has recouped the losses in early Asian trading this morning.
“Prices rose further on the relief that the US-China trade status remained intact and on indications that despite Covid-19 infections increasing, road fuel demand and global traffic are still standing strong”.