Crude Gains as Trade Tensions Ease

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On Tuesday, Brent crude rose 3.5 percent, while WTI gained 3.4 percent overall.

-China trade tensions and rising geopolitical upheaval in the Middle East. That was the highest finish for the most active contract since December 1, 2014, according to FactSet.

Geopolitical concerns elevated crude prices on Tuesday after President Donald Trump canceled his scheduled trip to multiple South American countries to focus on the US response to developments in Syria.

Market players now looked ahead to fresh data on US commercial crude inventories to gauge the strength of demand in the world's largest oil consumer and how fast output levels will continue to rise.

One of the immediate factors helping to lift Brent above $70 was Trump's Monday promise to respond "forcefully" to the suspected chemical attack in Syria.

Brent crude futures were last up US$1.35 at US$70.00 a barrel by 1418 GMT, while West Texas Intermediate crude futures rose US$1.30 to US$64.72 a barrel.

Prices of both crude benchmarks have risen more than 5 percent in the past two trading days.

Iran warns USA against deal violation
He also took aim at his hardline opponents on the domestic front, who have criticised his efforts to reach out to the West.

The Saudis want oil prices near $80, in part to support the valuation of state-owned energy giant Aramco ahead of its initial public offering, Bloomberg News reported Tuesday (https://www.bloomberg.com/news/articles/2018-04-10/saudi-arabia-is-said-to-signal-ambition-for-80-oil-price?utm_medium=social&utm_campaign=socialflow-organic&utm_content=markets&cmpid%3D=socialflow-twitter-markets&utm_source=twitter), citing people who have spoken to delegates from the Organization of the Petroleum Exporting Countries and oil market participants.

OANDA's Innes said the API report had "temporarily taken a bit of wind out of the market".

"The EIA said that U.S. crude oil output is chiefly the function of price". It also forecast average retail gasoline prices of $2.74 a gallon for the summer driving season, up from $2.41 for the summer of 2017.

U.S. WTI crude futures were up 25 cents at $62.31 a barrel.

Industry group the American Petroleum Institute is due to release its weekly report yesterday. "However, oil market fundamentals are tightening and oil prices looks set to be squeezed higher as long as OPEC+ sticks to its cuts".

OPEC and other producers, including Russian Federation, agreed to cut output by about 1.8 million barrels per day (bpd) in November last year to slash global inventories to the five year-average.

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