The extension of the trade truce supports oil prices, albeit temporarily

Oil prices rose slightly on Tuesday, after US President Donald Trump extended the trade truce with China for an additional 90 days, postponing the increase in tariffs that were due to come into force today.

Brent crude rose by 0.3% to 66.85 dollars per barrel, while WTI rose by 0.2% to hover around 64 dollars.

How the extension of the truce affected the oil markets

Easing recession fears: the decision reassured markets that the escalation of the trade war between the world's two largest economies will not lead to a slowdown in global economic growth, protecting oil demand.

Stability of supply chains: tariff increases have avoided disruptions in global trade, especially with the approach of the holiday season on which American retailers depend.

Limited reaction of investors: despite the apparent positivity of the news, the gains remained insignificant due to the state of cautious anticipation towards US inflation data and the upcoming meeting between Trump and Russian President Vladimir Putin.

What factors will determine the direction of oil in the coming period?

- US inflation data

Investors are waiting for the Consumer Price Index (CPI) data to be announced later today, as it may affect the Fed's expectations on interest rates.

If the data show a slowdown in inflation, this may strengthen the prospects for a rate cut, which will support economic activity and oil demand.

- Trump and Putin summit in Alaska

Trump and his Russian counterpart are scheduled to meet next Friday in Alaska to discuss ending the war in Ukraine.

Any progress towards peace could ease sanctions on Russian oil exports, increasing global supply and putting pressure on prices.

But the recent comments of Ukrainian President Volodymyr Zelensky, who refused to cede any Ukrainian territory in favor of Russia, have weakened hopes for a quick resolution, which could preserve market uncertainty.

- Oversupply concerns

Markets are still worried about the possibility of an increase in Russian production if sanctions are lifted, especially as OPEC continues to pump more oil.

Some analysts have warned that oil prices could fall below 60 dollars per barrel if these scenarios materialize.

While oil is still in a slight upward trend, the markets remain on the lookout for any sudden developments that may change the course in the coming days.