Oil prices ease off 2-week highs after US, China pause tariff war

Oil prices eased on Tuesday from a two-week high reached during the previous session after the U.S. and China agreed to temporarily slash tariffs, sparking optimism that a trade war between the world’s two biggest economies would come to an end.

The U.S. and China agreed to slash steep tariffs for at least 90 days, sending Wall Street stocks, the U.S. dollar and crude prices sharply higher on Monday.

But underlying schisms that led to the dispute remain, including the U.S. trade deficit with China and U.S. President Donald Trump’s demand for more action from Beijing to combat the U.S. fentanyl crisis.

Brent crude futures dropped 14 cents, or 0.2%, to $64.82 per barrel by 0011 GMT. U.S. West Texas Intermediate (WTI) crude fell 13 cents, or 0.2%, to $61.82.

Both benchmarks closed about 1.5% higher on Monday at their steepest settlements since April 28. The gains come during a turbulent time for global oil markets.

Last month, oil prices fell to a four-year low on investor worries that the U.S.-China trade war could depress economic growth and oil demand. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected.