(Bloomberg) -- Oil halted a two-week losing streak as trade tensions between the U.S. and China showed signs of easing, soothing a volatile market focused on the economic growth that underpins crude demand.
Futures rose 0.7% on Friday in New York. The gain capped a tumultuous week of seesawing geopolitical indicators and conflicting supply forecasts. The protracted trade deadlock between the world’s two largest economies showed signs of breaking after U.S. President Donald Trump predicted he would speak “very soon” with Chinese leader Xi Jinping.
“There was some relieving of trade tensions this week so I think there’s a bit of optimism in the market,” said Phil Streible, senior market strategist at RJO futures. “But many people are still bearish on crude. It will take a deal in writing between the two countries to change the dynamic in market.”
Despite the weekly gain, oil was still down 6.3% this month. Saudi Arabia’s pledge to curb crude exports has done little to bump prices higher. A second weekly surprise increase in American crude inventories compounded demand fears after weak economic data from the biggest economies of Europe and Asia stoked negative sentiment. Meanwhile, OPEC warned that oil markets face a “somewhat bearish” outlook, despite tightening supplies.
“The yo-yoing on the oil market continues and the oil price remains highly prone to fluctuations,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “The oil price currently remains at the mercy of expectations for the global economy, and is thus caught between economic concerns and hopes that the trade dispute might end soon.”
West Texas Intermediate crude for September delivery gained 40 cents to settle at $54.87 a barrel at on the New York Mercantile Exchange.
Brent for October settlement added 41 cents to $58.64 on the ICE Futures Europe Exchange. The global benchmark traded at a $3.83 premium to WTI for the same month.
See also: Goldman’s Currie Sees Oil ‘Unlikely’ to Reach $75/Barrel
New planned U.S. tariffs on some Chinese goods have derailed efforts by the two nations to resolve their dispute, China’s State Council Tariff Committee said in a statement on Thursday. Meanwhile, Trump told reporters he has a call scheduled “very soon” with Chinese President Xi Jinping on trade.
--With assistance from Sharon Cho and Grant Smith.
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