Oil prices rose in Asian trade on Tuesday after U.S. President Donald Trump issued a warning against Tehran over the Israel-Iran conflict, keeping concerns over supply disruptions largely in play.
But crude did sharply curb its initial gains after U.S. officials said the country was not directly joining the conflict, helping soothe some concerns over an immediate escalation between Israel and Iran.
Conflicting reports over Iran seeking a ceasefire, coupled with soft data from top oil importer China, also weighed on oil prices on Monday, causing them to taper some gains made on the onset of the Middle East conflict last week.
Brent oil futures for August rose 0.3% to $73.46 a barrel, while West Texas Intermediate crude futures rose 0.4% to $70.58 a barrel by 21:27 ET (01:27 GMT).
Trump says ‘everyone should evacuate Tehran’ Trump on Monday evening said in a social media post that ‘everyone should evacuate Tehran,’ ramping up concerns over U.S. involvement and a rapid escalation in the Iran-Israel conflict.
But White House officials clarified that the U.S. was not getting directly involved in the conflict, and was maintaining defensive positions in the Middle East.
Oil soared as much as 2% after Trump’s comments, but then sharply pared gains.
Trump said his administration was working on a ceasefire, while reports also suggested that Iran was seeking peace. But Tehran denied such reports.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The conflict, which was now in its fifth straight day, showed little sign of deescalating, with Iran launching barrages of missiles against Israel after the country attacked Tehran’s nuclear facilities.
Oil prices had rallied after Israel’s initial strike on Friday, amid bets that crude supplies in the Middle East will be disrupted by the conflict. Iran is a major oil producer, and is a member of the Organization of Petroleum Exporting Countries.
Mixed China data, ceasefire talk weighs on oil Oil prices fell sharply on Monday as reports that Iran was seeking a ceasefire with Israel largely offset concerns over the conflict, although Tehran said it was not open to negotiating a ceasefire while under Israeli attack.
Oil was also pressured by mixed economic readings from top oil importer China, which presented mixed cues on the world’s second-largest economy. China’s industrial production grew less than expected in May, while retail sales beat expectations.
While oil has advanced on fears of potential supply disruptions in the Middle East, it has struggled to maintain gains amid persistent concerns over slowing demand, especially amid trade hostilities between the U.S. and China.
Oil markets also feared that steady production increases by the OPEC will cause a supply glut later in the year.
