Oil prices edge higher as US-China tariff truce calms market nerves

SINGAPORE: Oil prices inched up on Tuesday after the United States and China agreed to extend their pause on higher tariffs, easing fears of a renewed trade war that could hit global fuel demand.

Brent crude rose 26 cents, or 0.39 percent, to $66.89 a barrel by 0015 GMT. US West Texas Intermediate (WTI) crude gained 22 cents, or 0.34 percent, to $64.18.

The White House confirmed late on Monday that President Donald Trump had extended the tariff truce with Beijing by another 90 days. The move delays steep duties on Chinese goods, offering US retailers some relief as they prepare for the year-end shopping season.

The extension raised hopes that Washington and Beijing might strike a longer-term deal, avoiding a damaging trade standoff. Analysts say prolonged tariffs risk slowing economic growth, which would weaken oil demand and push prices down.

Markets are also eyeing an upcoming meeting between Trump and Russian President Vladimir Putin, set for August 15 in Alaska. The two leaders are expected to discuss ending the war in Ukraine. The talks come as the US warns of tougher measures on countries buying Russian oil, including China and India, if no peace agreement is reached.

“Any peace deal between Russia and Ukraine would remove a major source of uncertainty in oil markets,” said Daniel Hynes, senior commodity strategist at ANZ, in a note.

Last week, Trump threatened secondary sanctions on Russian oil buyers unless Moscow agreed to a peace plan. Washington has also pressed Beijing to curb purchases, but tensions have eased in the run-up to the Alaska talks.

Investors are also awaiting US inflation data due later on Tuesday, which could influence the Federal Reserve’s interest rate decisions. Any sign of a rate cut would likely lend support to crude prices.