- Oil prices come under pressure after earlier rising more than 2 percent and extending Monday’s strong gains.
- OPEC is expected to agree to output cuts on Thursday, while Alberta is mandating reductions in Canadian crude supplies.
- Both benchmarks climbed around 4 percent on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at a meeting of the G-20 to pause an escalating trade dispute.
Oil prices pared gains in a volatile trade on Tuesday as fears flared that demand would stall due to a trade war between the U.S. and China, and as Russia remained a stumbling block to a deal to cut global crude supply.
U.S. President Donald Trump made clear he would revert to tariffs on China if the two sides could not resolve their differences.
The comments put a damper on market enthusiasm that drove oil about 4 percent higher on Monday after Trump and Chinese counterpart Xi Jinping agreed at a meeting of the Group of 20 industrialized nations to pause an escalating trade dispute.
In Monday’s session, expectations of a production cut by the OPEC and its allies, when they meet on Thursday and Friday in Vienna, had also supported prices.
OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million barrels per day, four sources said on Tuesday, adding that Russia’s resistance to a significant production cut was so far the main stumbling block.
The United States Oil Fund LP (USO) was trading at $11.24 per share on Tuesday afternoon, down $0.03 (-0.27%). Year-to-date, USO has declined -6.41%, versus a 2.48% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of CNBC.