Crude oil prices edged higher on Tuesday, with traders betting on possible supply shortage after U.S. sanctions on Iran that come into force from early November.
Saudi Arabia’s remarks that it was comfortable with Brent oil above $80 a barrel, at least in the short term, supported oil’s upmove.
Rising geopolitical tensions after Russia blamed Israel for the loss of one of its reconnaissance planes shot down overnight by Syrian defense systems, too contributed to oil’s rise.
Crude oil futures for October delivery ended up $0.94, or 1.4%, at $69.85 a barrel. On Monday, crude oil futures ended down $0.08, or 0.1%, at $68.91 a barrel.
Traders are also awaiting the outcome of the meeting of OPEC and non-OPEC oil producers, scheduled to take place later in the month.
The American Petroleum Institute is scheduled to release its weekly crude supply data later in the day. The official data from the U.S. Energy Information Administration is due for release on Wednesday morning.
Traders are also weighing the prospects of a drop in crude demand due to escalating U.S.-China trade tensions.
The U.S. government today announced a 10% tariff on about $200 billion in imports from China, staring next week. The tariffs will be set at 10% until the year-end, but would increase to 25% from January 1. U.S. President Donald
Trump also warned that he would pursue tariffs on approximately USD 267 billion of additional imports if China takes retaliatory action.
The Chinese government, which stated that the United States has not been “sincere” and it has no choice but to retaliate, has imposed tariffs on $60 billion in American products and this will come into force from September 24.