Oil Mixed Over Continually Increasing U.S.-China Tensions

Tuesday,   02-Jun-2020   09:02 AM (IST)

Oil was mixed on Tuesday morning in Asia, with caution over mounting U.S.-China tensions mingling with optimism over the possibility of an extension of OPEC production cuts. Brent oil futures rose 0.29% to $38.47 by 9:33 PM ET (2:33 AM GMT), giving up some of its earlier gains. WTI futures gained 0.23% to $35.52. Investor caution remained after the Chinese government told state-owned traders Cofco and Sinograin on Monday to halt purchases of American soybeans and other U.S. agricultural goods. It was also reported that Chinese buyers also cancelled some U.S. pork orders. These actions put a hard-won phase one of the U.S.-China trade deal, as well as the fragile demand recovery for the black liquid, in jeopardy with tensions between the two countries continuing to mount. Meanwhile, investors are waiting to see whether OPEC will extend the timeframe of its production cuts, which have been in place since May, into July or even August. An extension of the cuts would prevent a supply glut, with demand recovery sluggish even though more countries are loosening lockdowns and re-opening their economies. The body will make the decision when it meets online later in the week.