Oil prices rebound from 5-month lows; Ukraine news eyed

Investing.com -- Oil prices rose Tuesday, rebounding from five-month lows as concerns over a looming supply glut and weakening demand sapped confidence in crude.

At 09:00 ET (13:00 GMT), Brent oil futures for December gained 0.5% to $61.32 a barrel and West Texas Intermediate crude futures rose 0.6% to $57.34 a barrel.

Both contracts hit the lowest since early May on Monday on ongoing concerns about oversupply and slowing economic growth.

Oil helped by easing U.S.-China tensions

Crude prices have edged higher on easing concerns surrounding the trade dispute between the U.S. and China, the world’s top two oil consumers.

U.S. President Donald Trump indicated on Monday that he expects to reach a fair trade deal with Chinese President Xi Jinping at a meeting between the two on the sidelines of an economic conference in South Korea next week.

Trade tensions between the world’s two biggest economies have weighed on global confidence, with a prolonged trade dispute seen weighing on global demand.

Ukraine negotiations in spotlight

Leaders of European nations, including Britain, France and Germany, on Tuesday issued a joint statement setting out support for Ukraine and President Trump’s efforts to end the fighting there.

"We strongly support President Trump’s position that the fighting should stop immediately, and that the current line of contact should be the starting point of negotiations," the statement, published by the British government said.

Signs of unity between the Western governments have prompted markets to gain confidence that they can push Russian president Vladimir Putin to the negotiating table, potentially with the chance of more U.S. restrictions against Moscow’s oil shipments.

Oil pressured by oversupply concerns, weak demand outlook

Oil prices have been on a three-week losing streak amid growing concerns over a looming supply glut in the coming months. 

Tanker traffic data from analytics firm Vortexa showed over 1.2 billion barrels of crude were in transit this week, amid increased global oil production and longer shipping routes. 

Increased production can be largely attributed to the Organization of Petroleum Exporting Countries and allies, which steadily ramped up output this year as it sought to unwind two years of production cuts. 

Increased oil exports from the Americas – specifically the U.S. and Brazil – also buoyed global supplies, especially as U.S. President Donald Trump called for more energy production and lower oil prices. 

Ambar Warrick contributed to this article