NEW YORK (Reuters) - Oil futures edged higher in volatile trade on Monday as rising tensions between the United States and Iran buoyed prices after they touched a one-month low following U.S. President Donald Trump’s threat that he may raise tariffs on Chinese goods.
Brent crude futures rose 39 cents to settle at $71.24 a barrel. The global benchmark earlier sank to $68.79 a barrel, its lowest since April 2.
U.S. West Texas Intermediate (WTI) crude futures rose 31 cents to settle at $62.25 a barrel. WTI’s session low was $60.04 a barrel, the weakest since March 29.
Additional buying was sparked after WTI broke through $62 a barrel in early afternoon trade, said Bob Yawger, director of energy futures at Mizuho in New York.
The United States is deploying a carrier strike group and a bomber task force to the Middle East to send a clear message to Iran that any attack on U.S. interests or its allies will be met with “unrelenting force,” U.S. national security adviser John Bolton said on Sunday. The development injected a risk premium into the market.
Acting U.S. Defense Secretary Patrick Shanahan said he had approved sending the carrier strike group and bombers to the Middle East because of a “credible threat by Iranian regime forces.”
“You’re seeing those increasing geopolitical tensions,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
Prices fell early after Trump said on Twitter on Sunday that tariffs on $200 billion of goods would increase on Friday to 25 percent, reversing his February decision to keep them at 10 percent due to progress in trade talks.
Trump early on Monday appeared to defend his Sunday statement, citing the trade deficit between the United States and China. “Sorry, we’re not going to be doing that anymore!” he tweeted.
The comments worried investors about trade talk progress between the world’s two largest economies and ignited concerns that ongoing tensions could hurt global oil demand.
China’s Foreign Ministry spokesman Geng Shuang told a news briefing on Monday that a Chinese delegation was still preparing to go to the United States for trade talks.
“We are also in the process of understanding the relevant situation,” he said.
Within the oil industry, there are signs of a further rise in output from the United States, where crude production has surged by more than 2 million barrels per day (bpd) since early 2018 to a record 12.3 million bpd.
The United States is now the world’s biggest oil producer, ahead of Russia and Saudi Arabia.
Additional reporting by Ahmad Ghaddar in London and Henning Gloystein in Singapore; editing by G Crosse and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.