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Crude Oil Futures Settle Higher

Crude oil prices moved higher on Tuesday amid supply concerns and slightly easing worries about energy demand after the U.S. and China struck a conciliatory tone on trade talks.

OPEC-led production cuts, reports of drone attacks on Saudi pumping stations and concerns about likely disruption in crude supply following the tanker attacks in the Middle East over the weekend contributed as well to oil's uptick.

Saudi Arabia today reported "armed drones" attacked two pumping stations in the kingdom, underscoring rising tensions in the Middle East.

The attack comes a day after two of Saudi Arabia's oil tankers were sabotaged off the coast of the United Arab Emirates.

West Texas Intermediate Crude oil futures for June ended up $0.74, or 1.2%, at $61.78 a barrel, after climbing to a high of $62.11 intraday.

On Monday, WTI crude oil futures for June ended down $0.62, or about 1%, at $61.04 a barrel, after rising to a high of $63.33 earlier in the session.

Despite China's retaliatory tariffs on U.S. goods, worries about trade conflict have eased a bit today amid signs the U.S. and China are likely to get closer to achieving a trade deal.

U.S. President Donald Trump today indicated that he would be meeting with Chinese President Xi Jinping at the G20 Summit in Japan late next month.

"We have a very good relationship. Maybe something will happen," Trump said. "But we're going to be meeting, as you know, at the G20 in Japan. And that will be, I think, probably, a very fruitful meeting."

Meanwhile, a U.S. official said Iran was the likely culprit after four commercial vessels, including two Saudi oil tankers, were sabotaged on Sunday near Fujairah.

"We need to do a thorough investigation to understand what happened, why it happened, and then come up with reasonable responses short of war," John Abizaid, U.S. ambassador to Saudi Arabia told reporters in the Saudi capital Riyadh in remarks published on Tuesday.

Markets are looking ahead to the weekly inventory data. The American Petroleum Institute is scheduled to come up with its weekly oil report later today, while the Energy Information Administration's inventory report is due Wednesday morning.

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