Oil prices rose slightly on Tuesday ahead of U.S. data expected to show crude stocks declining there, outweighing investors’ concerns that U.S.-China trade tensions could weigh on fuel demand.
Benchmark Brent crude futures were up 32 cents at $65.18 a barrel.
U.S. crude futures rose 18 cents to $58.09 a barrel.
Investors shrugged off U.S. President Donald Trump’s comments on Tuesday that the United States would obliterate parts of Iran if it attacked “anything American.”
Oil-market jitters over the escalating tension between the United States and Iran have eased after Trump targeted Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday, after calling off a retaliatory air strike, analysts said.
Sending a bullish signal, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories likely fell for a second consecutive week last week.
The numbers came ahead of crude stock data from the American Petroleum Institute (API), an industry group, at 3:30 p.m. CST (2030 GMT) on Tuesday, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy, due on Wednesday.
But concerns over U.S.-China trade tensions and global growth still were pressuring prices, analysts said.
“You’re going to see oil have trouble picking a direction over the next couple days,” said Josh Graves, senior market strategist at RJO Futures in Chicago. “There’s a tug-of-war between bullish and bearish factors.”
Weighing on prices, hopes for progress in the trade war between China and the United States during this week’s G20 meeting were dampened by a senior U.S. official saying President Donald Trump was “comfortable with any outcome” from the talks.
“The U.S.-China meeting on the side of G20 could signal further rapprochement on trade, but the market needs something it can sink it’s teeth into,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
“We’ve been going back and forth on U.S.-China trade disputes for over a year now,” McGillian added.
Demand concerns were briefly overcome last week when Brent climbed 5% and U.S. crude surged almost 10%, its strongest week since 2016, after Iran shot down a U.S. drone, adding to tensions stoked by previous attacks on oil tankers in the area.
Washington has blamed the tanker attacks on Iran, which denies any role.
The Organization of the Petroleum Exporting Countries and its allies including Russia appear likely to extend a deal on curbing output when they meet on July 1-2.
Russian Energy Minister Alexander Novak said international cooperation on crude production had helped stabilize oil markets and was more important than ever. He also voiced concerns about demand.
The chief executive of Saudi Aramco, the state oil firm of OPEC’s de facto leader, said its spare capacity of 12 million barrels per day (bpd) was sufficient and that it would meet its customers’ needs.
U.S. sanctions on Iran and Venezuela have cut oil exports from the two OPEC members, but U.S. production has been rising.