Oil extends gains amid Middle East tensions, U.S.-China trade deal hopes

TOKYO, June 19 (Reuters) - Oil prices climbed on Wednesday,
extending sharp gains from the previous session on rekindled
hopes for a U.S.-China trade deal and on continued tensions in
the Middle East after tanker attacks there last week.
Brent crude futures LCOc1 were up 34 cents, or 0.6%, at
$62.48 a barrel by 0028 GMT. They rose 2% on Tuesday.
U.S. West Texas Intermediate crude CLc1 gained 44 cents,
or 0.8%, to $54.34 a barrel. The U.S. benchmark surged 3.8% in
the last session.
In a post on Twitter, U.S. President Donald Trump said
preparations were starting for him to meet Chinese President Xi
Jinping at the G20 summit in Osaka next week.
That comes after talks to reach a broad deal on trade
between the United States and China broke down last month after
Washington accused the Chinese of backing away from previously
agreed commitments.
Interaction between the two sides since then has been
limited, and Trump has threatened, repeatedly, to slap more
tariffs on Chinese products in an escalation that businesses in
both countries want to avoid.
"Global demand for crude got a boost on expectations that
trade talks are showing some positive signs following President
Trump's tweets," said Edward Moya, senior market analyst at
OANDA in New York.
Tensions in the Middle East after last week's tanker attacks
also remain high, with Trump saying he was prepared to take
military action to stop Iran having a nuclear bomb but leaving
open whether he would sanction the use of force to protect Gulf
oil supplies.
Fears of a confrontation between Iran and the United States
have mounted since last Thursday's oil tanker attacks, which
Washington has blamed on Tehran. Iran has denied involvement.
Iran said this week it would breach internationally agreed
curbs on its stock of low-enriched uranium within 10 days,
adding that European nations still had time to save a landmark
nuclear deal.
The U.S. is deploying about 1,000 more troops to the Middle
East for what Washington said were defensive purposes, citing
concerns about a threat from Iran.
Market participants are also waiting for a meeting between
the Organization of the Petroleum Exporting Countries (OPEC) and
other producers including Russia, a group known as OPEC+, to
decide whether to extend a supply reduction pact that ends this
month.
OPEC and non-OPEC states are discussing holding meetings on
July 10-12 in Vienna, a date range proposed by Iran, OPEC
sources said on Tuesday.
U.S. crude stocks also fell by 812,000 barrels last week to
482 million, industry group the American Petroleum Institute
said on Tuesday.
Official estimates are due on Wednesday. EIA/S