Oil gains amid U.S.-China trade deal hopes, ECB talk of easing policy

© Reuters. Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang

Oil prices extended gains into a second session on Wednesday, buoyed by rekindled hopes for a U.S.-China trade deal and potential economic stimulus from the European Central Bank (ECB).

Tensions in the Middle East after tanker attacks there last week also supported oil markets.

Tensions in the Middle East after last week’s tanker attacks 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 attacks, which Washington has blamed on Tehran. Iran has denied involvement.

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.

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