WTI trades higher above $61.00 on diminishing fears of global trade war

• The Oil price rises to near $61.30 on NYMEX on expectations that the trade war will be limited between the US and China.
• US President Trump has increased additional tariffs on China to 145%.
• US Hassett confirms on positive development in trade talks with the EU.

West Texas Intermediate (WTI), futures on NYMEX, rises to near $61.30 during North American trading hours on Monday. The Oil price gains as fears of a global trade war have diminished. Investors expect that the trade war will remain confined between the United States (US) and China.

Financial market participants have become confident of a less-disruptive trade war after US President Donald Trump announced a 90-day pause in the execution of reciprocal tariffs on all of its trading partners, except China. Additionally, US National Economic Council (NEC) Kevin Hassett said in an interview with Fox Business Network that we are making "enormous progress" on tariff talks with the European Union (EU).

Last week, Trump kept tariffs on China and raised them to 145%, inclusive of Fentanyl duty, as it retaliated against his reciprocal tariffs. Similarly, China has also increased additional levy on the US to 125% as a countermeasure to offset the impact of Trump's tariffs. Beijing already warned that it will do anything to "safeguard its rights and interests".

Though the less-disruptive trade war will have a moderate impact on the Oil demand outlook than what market participants had anticipated earlier, it will remain uncertain as China is the largest importer of energy in the world. The demand for Oil will remain sluggish if the Chinese economy faces a slowdown due to a tit-for-tat tariff fight with the US.