LONDON -Oil prices edged up on Tuesday on optimism that a trade war between the United States and its major trading partners was abating and as President Donald Trump ramped up pressure on Russia over its war in Ukraine.
Brent crude futures were up 47 cents, or 0.7%, at $70.51 a barrel at 0924 GMT, having touched their highest since July 18, while U.S. West Texas Intermediate crude was at $67.24, up 53 cents, or 0.8%.
Both contracts settled more than 2% higher in the previous session.
The trade agreement between the United States and the European Union, while imposing a 15% import tariff on most EU goods, sidestepped a full-blown trade war between the two major allies that would have rippled across nearly a third of global trade and dimmed the outlook for fuel demand.
The agreement also calls for $750 billion of EU purchases of U.S. energy over the next three years, which analysts say the bloc has virtually no chance of meeting, while European companies are to invest $600 billion in the U.S. over the course of President Donald Trump’s second term.
Top economic officials from the U.S. and China are meeting in Stockholm for a second day to resolve longstanding economic disputes and step back from an escalating trade war between the world’s two biggest economies.
Trump also set a new deadline on Monday of “10 or 12 days” for Russia to make progress toward ending the war in Ukraine. Trump has threatened sanctions on both Russia and buyers of its exports unless progress is made.
“Oil prices rallied after President Trump said he would shorten the deadline for Russia to come to a deal with Ukraine to end the war, raising supply concerns,” ING analysts said in a note.
Market participants are also waiting to hear the outcome of the U.S. Federal Open Market Committee meeting on July 29-30. The Fed is widely expected to hold rates but could signal a dovish tilt amid signs of cooling inflation, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
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