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Oil rose after four days of losses as President Donald Trump gave mixed signals on resolving the U.S.-China trade dispute.
Futures in New York increased as much as 1.7% after falling 4.8% over the previous four sessions. Trump struck a more conciliatory tone at the Group of Seven meeting in France, praising the willingness of China’s top trade negotiator, Vice Premier Liu He, to find a solution to the dispute. However, he didn’t indicate he planned to back down in the prolonged dispute.
“While de-escalation and the expectation of a temporary truce in the trade war may be what is lifting sentiment and oil prices this morning, the resolution of the U.S.-China rift will take time,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “Economic uncertainty has not been lifted, which still leaves a fair degree of hesitancy in going long oil.”
Crude is still down about 7% this month as the trade war weighs on the demand outlook for oil. The dispute has yielded little progress after more than two years of steady escalation, and countered efforts by the Organization of Petroleum Exporting Countries and its allies to boost prices by cutting production.
Trump said Aug. 26 that China had “called our trade people and said let’s get back to the table.” However, on Aug. 27, China’s Foreign Ministry spokesman said he was unaware of the calls, adding the U.S. decision to add new tariffs was hurtful to both sides.
Trump also signaled in Biarritz, France, that he was open to meet with Iranian President Hassan Rouhani and perhaps ease restrictions on the Islamic Republic that have slashed the nation’s oil exports. However, Iranian Foreign Minister Javad Zarif said Aug. 27 that such a meeting is “unimaginable.”