Oil prices steady as market weighs US-China trade developments
LONDON: Oil prices held steady on Tuesday, weighed down by rising supplies and caution over whether the pause in the U.S.-China trade war will lead to a longer-term deal.
Brent crude futures gained 9 cents, or 0.14%, to $65.05 a barrel by 0803 GMT. U.S. West Texas Intermediate (WTI) crude was up 11 cents, or about 0.2%, at $62.06.
The two benchmarks rose by about 4% or more in the previous session after the U.S. and China agreed on sharp reductions to tariffs for at least 90 days, which also boosted Wall Street stocks and the dollar.
The market is now evaluating the impact of the trade truce, said PVM analyst Tamas Varga.
"Coupled with the scheduled steep increase in OPEC+ supply in May and June, the upside might prove limited."
The Organization of the Petroleum Exporting Countries (OPEC) has raised oil output by more than previously expected since April, with May output likely to increase by 411,000 barrels per day.
There are signs, however, that demand for refined fuel remains strong.
"Despite the deteriorating outlook for crude demand, positive signals from the fuel markets cannot be overlooked," JPMorgan analysts said in a note.
"Although international crude prices have declined by 22% since their peak on January 15, both refined product prices and refining margins have remained stable."
Reduced refining capacity - mostly in the U.S. and Europe - is tightening gasoline and diesel balances, increasing reliance on imports and raising susceptibility to price spikes during maintenance and unplanned outages, they added. - Reuters
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