FX.co ★ Oil Prices Erase Early Gains

WTI crude oil futures declined to $59.1 per barrel on Tuesday, reversing earlier gains as markets continue to closely monitor US–China trade developments. US Treasury Secretary Scott Bessent confirmed on Monday that the plan for President Trump to meet with Chinese President Xi Jinping in South Korea later this month is still proceeding, despite renewed trade tensions between the two economic powerhouses. Additionally, President Trump mentioned the possibility of arming Ukraine with long-range Tomahawk missiles, escalating concerns about potential disruptions in Russian supplies. Nonetheless, the potential for oil price increases was moderated by easing tensions in the Middle East. This came after Hamas released Israeli hostages and Israel reciprocated by releasing Palestinian prisoners, which lowered risk premiums. Persistent concerns about a supply surplus also added downward pressure, with increased production from both OPEC+ and non-OPEC+ producers contributing to the market's oversupply worries.