But experts insist that oil output has to drop further for conditions to improve: File Image/Pixabay
Commodities traders desperate for even a glimmer of news that could be construed as positive got their wish on Tuesday with news from Washington that the 10 percent tariff on certain goods from China would be delayed - and this caused crude prices to soar by the most so far this year.
The notion that the delay signaled an easing of trade concerns over a global trade war mitigated another news item on Tuesday, from the American Petroleum Institute, that U.S. crude inventories last week climbed 3.7 million barrels to 443 million, compared with analysts' expectations for a decrease of 2.8 million barrels.
Brent rose $2.73, or 4.7 percent, to settle at $61.30 per barrel (the biggest daily percentage gain for Brent since December when the contract gained 7.9 percent), while West Texas Intermediate gained $2.17, or 4.0 percent, to settle at $57.10.
Harold Hamm, chief executive, Continental Resources
We need to make sure we don't oversupply the market
Oil was also supported by the Chinese Ministry of Commerce saying in a statement on Tuesday that U.S. and Chinese trade officials spoke on the phone and agreed to talk again within two weeks.
With expectations for improved market conditions beginning to bud, some industry players stressed that groundwork needed to be laid to ensure positive outcomes.
Harold Hamm, chief executive for Continental Resources, told an energy conference on Tuesday that the Organization of the Petroleum Exporting Countries (OPEC) should further cut its output and that U.S. shale producers "need to row our own boat...we need to make sure we don't oversupply the market."
It's worth noting that in the previous session, which saw oil trading fairly flat, Khaled al-Fadhel, oil minister for Kuwait, was quoted as saying he thinks fears of a global economic downturn were "exaggerated" and global crude demand should pick up in the second half of this year, helping to gradually reduce oil inventories.
But the general consensus of the perpetually fearful analytical community remains that geopolitical tensions are taking their toll: the International Energy Agency said mounting signs of an economic slowdown have caused global oil demand to grow at its slowest pace since the financial crisis of 2008.