Oil prices rose in volatile trading on Monday as market participants lowered their expectations of the Organization of the Petroleum Exporting Countries (OPEC) expected to increase production as investors weigh the impact of a trade dispute between the United States and China.
US light crude hit a two-month low of $ 63.59 a barrel in early trade, but recovered after that and rose 79 cents to settle at $ 65.85 a barrel.
Brent crude jumped $ 1.90 to $ 75.34 a barrel.
The gap between US crude and Brent widened to $ 9.75 a barrel after it was tight on Friday. China has imposed customs duties on imports from the United States and has indicated plans to impose tariffs on crude imports.
According to Reuters, traders said, this could lead to an increase in quantities of US rock oil, which can not find buyers. They pointed out that while these quantities would eventually find their way to places other than China, prices could be under pressure.
OPEC and independent producers will meet in Vienna on June 22 to decide on production policy. Russia and Saudi Arabia are pushing for more supplies.
Brent hit a three-and-a-half-year high above $ 80 a barrel in May. But has since fallen on reports of an intention to increase production.
“The market has picked up on expectations that production increases will be less than 1.5 million barrels per day and between 300-600 thousand barrels a day,” said Jenny McGillian, market research director at Tradeshow Energy in Stamford.
He added that disruption of supply in Venezuela and Libya also gave support to the market.
Source: Iraq’s Economic Center