Oil prices rose up on Tuesday, supported by concerns that tensions in the Middle East could lead to supply disruptions.
Hopes that behind-the-scenes talks between the United States and China will prevent a looming trade war between the world’s two biggest economies also supported global markets, including crude oil futures.
Brent sweet crude futures were at 70.20 dollars per barrel.
U.S. West Texas Intermediate (WTI) crude futures were at 65.69 dollars a barrel .
James Mick, Managing Director and Energy Portfolio Manager with asset management firm Tortoise, said “rising geopolitical tensions” were driving up oil prices.
The biggest risk was that the United States could re-introduce sanctions on Iran.
Iraq, the second biggest producer within the Organisation of the Petroleum Exporting Countries (OPEC) said on Monday that it also supports the producer cartel’s agreement to cut oil output.
OPEC, together with a group of non-OPEC producers led by Russia, started withholding production in 2017 in order to raise prices.
The deal to cut is scheduled to last through 2018, and there has been recent support by OPEC’s de-facto leader Saudi Arabia to extend the cuts into 2019.
In Asia, Shanghai crude oil futures saw their second day of trading, repeating Monday’s high volumes.
Some traders said that the influx of foreign oil money into Shanghai crude futures also contributed to the rise in the yuan to a 7-week high on Tuesday against the dollar. ($1 = 6.2592 Chinese yuan renminbi)