Oil dips from two-week high

Oil prices eased Tuesday from a two-week high due to concerns about rising supplies amid earlier optimism regarding the pause in the US-China trade war following both countries’ temporary reduction of tariffs. Brent crude futures dropped to $64.7 per barrel, while West Texas Intermediate (WTI) crude fell to $61.7. Both benchmarks closed about 0.5 percent higher on Monday, marking the steepest settlements since April 28. The gains occur when the global oil markets are experiencing volatility. Following the US and China’s agreement to lower high tariffs for at least 90 days, Wall Street stocks, the dollar, and crude prices also saw notable increases on Monday. Although a thawing of trade tensions between the US and China is beneficial, there remains significant uncertainty about what will transpire in the next 90 days. While the fundamental differences that led to the conflict persist, the potential for such uncertainty continues to challenge oil demand. President Donald Trump’s insistence that Beijing take more action to address the fentanyl crisis in the United States and the trade imbalance with China complicates matters. Markets are also closely monitoring growing supplies as a key factor in the decline of oil prices. Although demand has been a significant concern, OPEC+’s supply increases will help ensure that the oil market has enough supply for the remainder of the year. This still hinges on OPEC+’s ability to execute its aggressive supply-side plans.