Oil prices remained calm on Tuesday after a stable session, despite confusion over the status of the U.S.-China trade agreement.
The President spoke differently, although White House trade adviser Peter Navarro said that the hard-won deal was over and made surprise comments.
Brent crude fell 10 cents, or 0.2%, to $42.98 a barrel by 0649 GMT, after earlier skidding to a session low of $42.21. WTI crude oil was down 16 cents, or 0.4%, at $40.57 a barrel, having dropped to a low of $39.76.
US-China relations have reached their lowest point in years since the coronavirus pandemic that started in China hit hard on the USA. The president and his administration have repeatedly accused Beijing of not being transparent about the outbreak.
Prices dropped suddenly when Navarro said that the trade deal with China was over. Later, he made a statement that despite the lack of trust in the Chinese administration stating that the trade agreement is continuing.
Energy traders are skeptical of the relationship between the U.S. and China unless China’s agricultural commodity promises cannot quickly compensate for the deficit.
After the coronavirus crashes, as a result of the reopening of some US states and countries around the world, oil prices returned to rally with increasing demand. For example, in New York, the worst affected city in the US, the streets were closed for traffic due to the lockdown of more than 100 days.
Tensions in the Middle East also supported oil prices.
US and Canadian oil and gas operators have reduced the number of drilling rigs to a record level.
Even if there is a recovery in price, the previously declining capital investment in the first quarter does not return quickly.
Some analysts raised the oil price forecast for this year. They raised Brent from the previous $ 37 prediction to $ 43.70 per barrel.