(Bloomberg) -- Oil climbed along with Asian stocks and currencies as the first day of the latest round of trade talks ended without drama in Washington, just hours before U.S. tariffs on Chinese goods are set to rise.
Futures in New York rose as much as 1.3 percent to head for a weekly gain. President Donald Trump said Thursday that it was still possible to reach a trade deal this week but reiterated plans to raise tariffs on some $200 billion of Chinese goods as of 12:01 a.m. in New York on Friday. In a sign that supply could be tighter than expected, Iran’s oil shipments have tumbled this month with not a single ship seen leaving the nation’s oil terminals for foreign ports, according to tanker tracking data compiled by Bloomberg.
Oil prices have had a volatile week as investors tried to assess if there was still a chance for a U.S.-China trade deal after the White House said it planned to raise tariffs on Chinese goods. Rising tension between Washington and Tehran and the likelihood of output from Venezuela continuing to drop are pointing toward a tighter supply situation and lending some support to prices.
“The sell off seen in the past few days was a bit overdone, and oil is likely seeing a little bit of pullback as investors look towards a potential agreement” from the trade negotiations, said Daniel Hynes, a senior commodity strategist at ANZ Banking Group Ltd. in Sydney. There are also underlying supply issues because of Iran and Venezuela, but at the moment the market is focused on the trade talks, he said.
West Texas Intermediate crude for June delivery rose 65 cents, or 1.1%, to $62.35 a barrel on the New York Mercantile Exchange at 10:26 a.m. in Singapore after climbing as much as 79 cents earlier. The contract is up 39 cents, or 0.6%, since May 3, heading for its first weekly gain in three weeks.
Brent for July settlement climbed 64 cents, or 0.9%, to $71.03 a barrel on the London-based ICE (NYSE:ICE) Futures Europe exchange after closing little changed on Thursday. The global benchmark contract is trading at $8.60 premium to WTI.
