Pompeo has loudly criticized Beijing's response to the coronavirus, saying the slow response by China's leadership and lack of transparency cost thousands of lives globally, while China this week is confronting a sudden spike in cases of the virus after no new infections for two months, prompting a lockdown. The meeting also comes as North Korea heats up the rhetoric with South Korea, with North Korea blowing up a building in Kaesong that had become a liaison office between Seoul and Pyongyang.
Oil futures had moved higher ahead of news on the U.S.-China meeting, rallying on an announcement Monday afternoon that the Federal Reserve would expand its asset buying program to include U.S. corporate bonds. White House Economic Advisor Larry Kudlow said Monday he expects the U.S economy to bounce back quickly from the downturn caused by the government shutdown to slow the COVID-19 pandemic, saying he expects a "steep V recovery."
Investors will better gauge the recovery later Tuesday morning after May data for U.S. retail sales are released, with the market expecting retail sales to have increased 7.5% last month following a 16.4% contraction in April amid the government lockdown. Consumer spending is a key driver of economic growth in the United States.
Tuesday morning, the International Energy Agency released its monthly Oil Market Report calling for a more balanced market in the second half of the year amid steep production cuts by OPEC+ and the United States. IEA expects global oil demand to fall year on year by 8.1 million barrels per day (bpd) before recovering by 5.7 million bpd in 2021. Demand for jet fuel remains in distress said the Paris-based agency.
In early trading, NYMEX July West Texas Intermediate futures were up $0.70 near $37.80 per barrel (bbl), with ICE August Brent futures $0.85 higher near $40.55 bbl. NYMEX July RBOB futures were 3.1 cents higher near $1.1965 gallon, and July ULSD futures gained 2.65 cents to $1.1635 gallon.
Brian L. Milne can be reached at brian.milne@dtn.com
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June 16, 2020 at 07:12PM
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Oil Higher in Morning Trade - DTN The Progressive Farmer
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