SINGAPORE (Reuters) – Oil prices rose on Tuesday on escalating U.S.-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year.
FILE PHOTO: An oil well pump jack is seen at an oil field supply yard near Denver, Colorado, U.S., February 2, 2015. REUTERS/Rick Wilking/File Photo
But gains were checked by concerns that a prolonged trade war between Washington and Beijing could lead to a global economic slowdown.
Brent crude futures, the international benchmark for oil prices, were at $72.18 per barrel at 0651 GMT, up 21 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 31 cents, or 0.5 percent, at $63.41 per barrel.
“Escalating tensions between the U.S. and Iran, in addition to signs that OPEC will continue its production cut, drove oil higher,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
U.S. President Donald Trump on Monday threatened Iran with “great force” if it attacked U.S. interests in the Middle East. This came after a rocket attack in Iraq’s capital Baghdad, which Washington suspects to have been organized by militia with ties to Iran.
Iran said on Tuesday that it would resist U.S. pressure, declining further talks under current circumstances.
The tension comes amid an already tight market as the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been withholding supply since the start of the year to prop up prices.
A meeting has been scheduled for June 25-26 to discuss the policy, but the group is now considering moving the event to July 3-4, according to OPEC sources on Monday, with its de-facto leader Saudi Arabia signaling a willingness to continue withholding output.
Price gains were constrained by pressure on financial markets, which have this week been weighed down by worries that the United States and China are digging in for a long, costly trade war that could result in a broad global slowdown.
Singapore, seen as a bellwether for the health of the global economy, on Tuesday posted its lowest quarterly growth in nearly a decade of 1.2 percent year-on-year. Growth in Thailand, a key Asian emerging market, also slowed to a multi-year low.
Reporting by Henning Gloystein; Editing by Richard Pullin and Joseph Radford