Oil gains with weak dollar, US-China trade truce

By Ovunc Kutlu

ANKARA

Oil prices have continued to gain on Tuesday as the American dollar weakened and the trade truce between the U.S. and China encouraged optimism for global demand.

International benchmark Brent crude was trading at $62.11 per barrel at 0600 GMT with a 0.3 percent gain, after it closed Monday at $61.89 a barrel.

American benchmark West Texas Intermediate (WTI) was recorded at $53.34 a barrel at the same time, with a 0.2 percent increase, after ending Monday at $53.25 per barrel.

U.S. President Donald Trump said Monday on social media that China had agreed to reduce and remove tariffs on cars it imports from the U.S.

The world's two biggest economies agreed at the conclusion of the G20 meeting in Argentina's capital Buenos Aires that they would not impose any more tariffs or increase the rate of tariffs for at least 90 days until Washington and Beijing hold meetings to solve trade disputes.

"My meeting in Argentina with President Xi [Jinping] of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!" he wrote on Twitter.

The three-month truce has carried optimism to the markets for investors. This is based on the trade dispute being put on hold for now in order that it will not snowball into other major oil importing countries, but instead keep crude demand high.

With the trade truce, the U.S. dollar has also withdrawn moderately from its highs. The U.S. dollar index, which measures the power of the greenback against a major of six currencies, fell 0.3 percent on Monday, and was down 0.2 percent at 0600 GMT on Tuesday.

In addition, the 10-year U.S. Treasury bond yields were down 2.2 basis points on Monday to 2.97 percent -- its lowest level in three months.

A weaker dollar supported demand for crude oil, which are indexed to the U.S. dollar, and pushed prices higher on Monday.

Brent oil closed Monday with a 5.4 percent gain, while WTI ended with 1.8 percent increase.