Oil prices edged up slightly after a sharp drop on Monday after U.S. President Donald Trump harshly criticized Federal Reserve Chairman Jerome Powell, shaking global markets.
Brent traded near $67 a barrel after falling 2.5% in the previous session, the largest drop in over a week. The partial recovery of crude oil was supported by the rebound of U.S. stock futures.
In his latest speech against Powell, Trump warned that the U.S. economy could slow down if the central bank does not act to cut interest rates. The president has considered firing the Fed chairman, causing investors to sell stocks, bonds, and the U.S. dollar on Monday.
Oil prices are caught in chaos, extending the downward trend this month which has already been exacerbated by rising tensions between the U.S. and its top trading partners.
"In the short term, I believe that the biggest sell-off is behind us," said Martijn Rats, global oil strategist at Morgan Stanley, in a Bloomberg Television interview. "As we go through the summer, seasonal demand supports a bit, but then in the second half of the year, we may have another phase of downward pressure."
Despite the recent pessimism as forecasters cut their oil demand forecasts, recent market measures have shown strength. The nearest Brent futures contract is trading at the largest premium for the next month since January, a sign of tight supply.
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