May 14 (UPI) -- Tighter oil markets and waning fears of a trade war between the United States and China helped push oil prices higher in early Monday trading.
U.S. President Donald Trump on Sunday turned to Twitter to announce that Chinese telecommunications company ZTE could get back to business after Washington blocked U.S. supplies to the company because of violating U.S. export restrictions on Iran.
Fears of a trade war emerged in April when both sides engaged in a multi-billion dollar tit-for-tat over tariffs. Those fears spilled over from equities markets into commodities to send crude oil prices following stock futures sharply lower.
Trump in his weekend message said to "be cool" on trade concerns because both sides were "working well together."
Markets were dampened somewhat by a monthly market report from the Organization of Petroleum Exporting Countries that made few major revisions to its global expectations. OPEC economists said in their report, published Monday, that the world economy would increase 3.8 percent for gross domestic product this year, the same rate as in 2017.
Oil demand growth, meanwhile, should average 98.85 million barrels per day for 2018, an increase of just 25,000 barrels per day from the April forecast.
OPEC economists, however, expressed concern on spending on future projects in the industry. Outside of OPEC, spending should increase 3.5 percent from last year and another 8.1 percent in 2019. But for shale developments, mostly in the United States, spending should increase by 20 percent, and then moderate to 16 percent for next year.
"It should also be noted that geopolitical developments will also continue to impact global oil supply developments in the months ahead," the economists wrote.
Supply-side concerns pushed oil prices up more than 1 percent for last week after U.S. President Donald Trump left the Iranian nuclear deal with world parties. That could eventually sideline about 1 million barrels per day from an already-tight market.
OPEC said it was, "as always," ready to support oil market stability.
OPEC is trying to drain a surplus from the five-year average in commercial oil stocks from advanced economies. OPEC reported those stocks are still 9 million barrels over the five-year average, but still sharply low than last year.