(RTTNews) – Crude oil rose on Tuesday as US-China trade frictions eased, overcoming gains in the US dollar and the impact of excess supply concerns.
WTI crude oil for November delivery was last seen trading up $0.38 (or 0.66%) at $57.90 a barrel.
There are many ups and downs in trade relations between America and China.
China, which dominates rare earth minerals, has imposed strict regulations on their exports to other countries, including the US, where manufacturing and technology companies are heavily dependent on these vital elements.
Angered by China’s move, Trump threatened to impose new 100% tariffs on China and suggested that he would not attend the meeting with Chinese President Xi Jinping in South Korea later this month.
Since the US and China are the world’s two largest economies and major consumers of crude oil, the friction affected crude oil prices.
Last weekend, in a softening of his stance, Trump acknowledged that higher tariffs on China are not sustainable and expressed a desire for smoother relations with China, although he stressed that China should take steps to side with the US.
In addition, Trump also confirmed that he will meet Xi in South Korea as scheduled this month. However, he warned that China could face tariffs of about 155% if it fails to reach a deal with the US.
Recent reports hinting at a truce between the two major economies have overshadowed oversupply concerns.
The US Dollar Index rose higher today and was last seen trading at 98.91, up 0.30%. The strengthening of the dollar had an impact on crude oil prices.
Trump is set to meet Russian President Vladimir Putin in Budapest, Hungary, to end the Russia-Ukraine war, though exact dates have not been officially announced.
Despite supporting Trump’s efforts to end the war, European leaders are unanimous that Russia is not serious about peace.
Yesterday, at a meeting in Luxembourg, EU energy ministers agreed to halt Russian oil and gas imports by 2028. This proposal must be approved by the European Parliament to take effect.
Crude oil prices were under pressure as supply and demand projections by the International Energy Agency and OPEC differed significantly, making it difficult for traders to interpret the data.
In its latest outlook last week, the Paris-based IEA expanded its prediction of a 2026 surplus from about 3.3 million barrels per day last month.
For 2025, it projected an increase in supply of 3.0 million bpd and for 2026, a further increase of 2.4 million. The agency also cut world demand growth this year to 710,000 bpd, 30,000 less than its previous estimate.
Meanwhile, OPEC, in its monthly report, reaffirmed expectations of solid growth in the global economy and maintained its forecast for demand to grow by 1.3 million bpd in 2025 and at a higher pace in 2026.
The government shutdown in the US entered its 21st day.
As the shutdown now reaches its third week, 750,000 federal employees have been furloughed, and about 1,400 US nuclear weapons workers now placed on unpaid leave could face mass layoffs, disrupting the maintenance of the US nuclear arsenal.
Amid ongoing economic uncertainty, with the next US Federal Reserve meeting scheduled to be held on October 28-29, markets are expecting a rate cut by the Fed.
In the Middle East, the first phase of the Trump-driven Gaza peace plan has been implemented without any hiccups.
On Sunday, Israel carried out airstrikes in Gaza, accusing the Palestinian Hamas militant group of violating the ceasefire, although Hamas denied the allegations and assured its commitment to the ceasefire.
While Trump said he thinks Hamas will do what is right, he also issued a stern warning to the terrorist group that if it fails to uphold its part of the agreement, the group will face a “swift, furious and brutal” end.
The peace established in the Middle East is long lasting and conducive to orderly and secure oil and energy transit.
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