Mubasher: Oil futures climbed on Monday after Saudi Arabia urged maintaining crude supplies at their current levels, while the US backed off its threat to levy tariffs on Mexican goods, clearing a cloud over the global economic growth, Reuters reported.

However, Monday’s rally was capped by worries about the overall health of the world economy and the consequent impact on fuel demand, traders told the news agency.

By 8:06 am GMT, US Nymex crude futures climbed by 0.74% to $54.39 per barrel (pb), while global benchmark Brent futures rose by 0.60% to $63.67 pb.

Crude markets were supported by statements from Saudi Arabia that the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, including Russia, were almost close to a consensus on extending the supply restraints through the second half of the year.

Since the start of the year, the producer club and non-affiliated partners, an alliance known as OPEC+, have been withholding their output in order to shore up crude prices and clear a market glut.

Moreover, bullish equity markets also lent a support to oil prices, Vanguard Markets managing partner Stephen Innes was cited by Reuters.

This mainly came after Washington’s tariff threat against Mexican goods was averted following a deal between the US and Mexico to counter illegal Central American migration.

Nevertheless, concerns persisted regarding the overall health of the global economy, as the US and China were still locked in a trade conflict.

“Slowing global demand appears to be featuring prominently on the markets’ collective mind, as the fallout from heightened trade tensions continues to be felt in the global economy,” futures brokerage FXTM  analyst Han Tan was quoted by Reuters.

Chinese crude imports dropped to nearly 40.23 million tonnes or 9.47 million barrels per day (bpd), retreating from an all-time high of 43.73 million tonnes last April.

This came after the world’s biggest crude consumer trimmed cargoes from Iran in the light of the US sanctions against Tehran.