NEW YORK: Oil futures edged higher in volatile trade on Monday as rising tensions between the United States and Iran buoyed prices, which earlier touched a one-month low after US President Donald Trump said he may raise tariffs on Chinese goods.
Brent crude futures rose 54 cents to US$71.39 a barrel as of 1.42pm (1742 GMT). The global benchmark earlier sank to US$68.79 a barrel, its lowest since Apr 2.
AdvertisementU.S. West Texas Intermediate (WTI) crude futures rose 50 cents to US$62.44 a barrel. WTI's session low was US$60.04 a barrel, the weakest since Mar 29.
Additional buying was sparked after WTI broke through US$62 a barrel in early afternoon trade, said Bob Yawger, director of energy futures at Mizuho in New York.
Injecting risk premium into the market, the United States is deploying a carrier strike group and a bomber task force to the Middle East to send a clear message to Iran that any attack on US interests or its allies will be met with "unrelenting force," US national security adviser John Bolton said on Sunday.
"You're seeing those increasing geopolitical tensions," said Phil Flynn, an analyst at Price Futures Group in Chicago.
AdvertisementAdvertisementElsewhere, top oil exporter Saudi Arabia raised its crude oil prices for June to its Asian and European customers, and cut prices to the United States, a signal that Riyadh is in no hurry to boost oil supply ahead of an OPEC meeting next month.
Also pressuring the market, Trump said on Twitter on Sunday that tariffs on US$200 billion of goods would increase on Friday to 25 per cent, reversing his February decision to keep them at 10 per cent due to progress in trade talks.
Trump early on Monday appeared to defend his Sunday statement, citing the trade deficit between the United States and China. "Sorry, we're not going to be doing that anymore!" he tweeted.
The comments worried investors about trade talk progress between the world's two largest economies and ignited concerns that ongoing tensions could hurt global oil demand.
China's Foreign Ministry spokesman Geng Shuang told a news briefing on Monday that a Chinese delegation was still preparing to go to the United States for trade talks.
"We are also in the process of understanding the relevant situation," he said.
Within the oil industry, there are signs of a further rise in output from the United States, where crude production has surged by more than two million barrels per day (bpd) since early 2018 to a record 12.3 million bpd.
The United States is now the world's biggest oil producer, ahead of Russia and Saudi Arabia.
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