NEW YORK: Oil prices rose on Tuesday, extending the previous day’s rally, 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 95 cents, or 1.36%, at $70.99 a barrel at 12 p.m. EDT (1600 GMT), having touched their highest since June 23, while US West Texas Intermediate crude was at $67.70, up 99 cents, or 1.48%. 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. “There is definitely some optimism around the trade deals,” said Bob Yawger, director of energy futures at Mizuho.
“It’s not perfect, especially for the Europeans, but it is better than it could have been by a long shot.”
The agreement also calls for $750 billion of EU purchases of US 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 US over Trump’s second term. Top economic officials from the US and China finished meetings in Stockholm that were aimed at resolving longstanding economic disputes and stepping back from an escalating trade war between the world’s two biggest economies.
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