Oil prices hold steady amid Middle east tensions, weak economic data

Oil prices steadied on Tuesday, caught between rising tensions in the Middle East and signs that economic growth is being hit by trade tensions between the United States and China.

Brent crude futures were up 4 cents at $60.98 a barrel by 0055 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

U.S. West Texas Intermediate (WTI) crude futures were 1 cent lower at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labour market.

"The market is in a rut and desperately in need of some robust economic data to get it out of this funk," said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.

U.S. President Donald Trump and China's President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the summit, although China has not confirmed the meeting.

Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.

But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran.

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