China and US agree to extend trade tariff truce, says Li
Investing.com -- Oil prices edged higher Tuesday, continuing the previous session’s sharp gains, fueled by optimism that President Donald Trump’s global trade war is abating as well as the increased risk of additional Russian tariffs.
At 08:25 ET (12:25 GMT), Brent Oil Futures expiring in September gained 0.5% to $69.64 a barrel and U.S. West Texas Intermediate (WTI) crude futures rose 0.5% to $67.07 per barrel.
Both contracts jumped more than 2% on Monday.
U.S. trade deals boost market
Oil has been supported by the progress in U.S. trade deals ahead of the August 1 tariff deadline.
The European Union signed a framework agreement on Sunday, easing tariff concerns and boosting expectations for future energy demand.
The deal sets a 15% tariff on most European exports to the United States, down from a threatened 30%. It also includes a commitment by the EU to buy $750 billion worth of U.S. energy products over the coming years.
The combination of reduced trade uncertainty and long‑term demand pledges lifted investor risk appetite and underpinned oil prices.
Trump shortens deadline for Russia to end Ukraine war
U.S. President Donald Trump raised geopolitical tensions by reducing the deadline for Russia to make progress toward ending the war in Ukraine to just 10 or 12 days.
He warned of sanctions if Russia fails to respond, triggering concerns about disruptions to Russian oil flows and tightening supply expectations
"No deal could see Russia facing tougher U.S. sanctions, along with the U.S. imposing secondary tariffs of 100% on trading partners that import Russian oil," ING analysts said in a note.
"If imposed and enforced strictly, it would cause a significant shift in the oil outlook," analysts wrote, noting that India, China, and Turkey have ramped up purchases of Russian crude since the start of the Ukraine war. They added that these countries must now weigh cheaper crude against possible steep U.S. export tariffs."
"Another key question is whether Trump would go ahead with these sanctions and secondary tariffs. It’s no secret that Trump is keen to see lower oil prices. Such an action would push prices significantly higher, erasing the expected surplus in the market through 2026."
Fed meeting looms large
Investors remain cautious as markets look ahead to key U.S. economic data and the Federal Reserve policy meeting.
The central bank begins its two‑day meeting on Tuesday and is expected to hold interest rates steady in the 4.25%–4.50% range.
On the supply side, an OPEC+ panel called for full compliance with agreed quotas as a ministerial meeting, due August 3, prepares to consider an increase in production for September.
Ayushman Ojha contributed to this article