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  • Trump’s threat to raise tariffs on China hurts the demand outlook.
  • A Chinese delegation is said to still travel to Washington this week.
  • Geopolitical tension is escalating in the Middle-East as well.

Crude oil prices started the new week under pressure and caused the barrel of West Texas Intermediate to test the $60 handle for the first time since the first week of April. However, the WTI didn’t have a difficult time rebounding in the second half of the day and was last seen trading up nearly 1% on a daily basis at $62.40.

U.S. President Trump on Sunday threatened to ramp up the tariff rate on Chinese imports to 25% from 10%, heightening concerns over a long-lasting trade conflict with China and its potential negative impact on the demand outlook of the world’s second largest consumer of oil.  

However, several news outlets later reported that China was still preparing to send a delegation to Washington this week, reviving hopes of a positive outcome in this week’s talks to help crude oil bounce from lows. Additionally, U.S. national security adviser John Bolton said that the U.S. was deploying a carrier strike group and bombers in the Middle East to show their seriousness about responding to any Iran actions against the U.S. interests, hinting toward tightening of supply and supporting crude oil prices.

Markets will be paying close attention to headlines surrounding the U.S.-China trade war in the remainder of the week. Furthermore, the EIA’s weekly oil market report, which last week showed an impressive increase in the U.S. oil production, will be looked upon for fresh impetus on Wednesday.

Technical levels