Oil declines

LONDON. — Oil declined yesterday, surrendering early gains, although the prospect of an easing in trade tensions between the United States and China helped stem losses.

Brent crude futures were down 35 cents at $78.16 a barrel by 1214 GMT (10.14 a.m. ET), having retreated from a session high of $79,19. US crude futures were down 2 cents at $71,26.

“Oil prices are finely balanced in today’s trading session. Ramping up of oil production in the US and concerns surrounding high oil prices impacting demand are weighing,” said Abhishek Kumar, senior analyst at Interfax Energy’s Global Gas Analytics.

“Nevertheless, signs of receding trade tensions between the US and China, together with ongoing geopolitical tensions in the Middle East and Venezuela’s deteriorating economic scenario, are limiting losses.”

A possible US trade war with China is “on hold” after the world’s two largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said on Sunday, giving global markets a lift in early Monday trade.

The energy ministers of Saudi Arabia and the United Arab Emirates last week voiced concern about recent oil market volatility and plan to meet Russian counterpart Alexander Novak in St Petersburg to continue consultations.

“It’s worth watching St Petersburg at the end of this week. That could provide the key input for the next few weeks,” Petromatrix strategist Olivier Jakob said.

BP chief executive Bob Dudley told Reuters he expected a flood of US shale and a possible reopening of OPEC taps to cool oil markets after crude rose above $80 a barrel last week.