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Oil Futures Settle Lower As U.S.-China Trade Tensions Weigh

Crude oil futures ended lower on Monday as concerns over near term energy demand outweighed prospects of a likely extension of production cuts by OPEC and allies, and slightly easing trade concerns.

The U.S. announced that it has decided to drop its plans to impose tariffs on Mexican imports, but concerns about U.S.-China trade tensions continue to linger.

West Texas Intermediate Crude oil futures for July ended down $0.73, or 1.4%, at $53.26 a barrel.

On Friday, crude oil futures for July ended up $1.40, or 2.7%, at $53.99 a barrel, after rising 1.8% a day earlier.

According to reports, Saudi Energy Minister Khalid al-Falih said that Russia was the only oil exporter still undecided on the need to extend the output deal agreed by top producers. The upcoming policy meeting in Vienna is likely to give clear clues about extension of cuts and the quantum thereof.

According to data released by the General Administration of Customs, China's exports grew 1.1% last month after falling 2.7% in April. Analysts had expected a 3.8% decline exports.

Imports, however, plummeted 8.5% after rising 4% in April given softening external conditions.

China's crude oil imports slipped in May to around 40.23 million tons, down from an all-time high of 43.73 million tons in April, because of lower imports from Iran caused by U.S. sanctions and refinery maintenance.

On U.S.-Mexico trade front, the two countries have reached an agreement to avert President Donald Trump's threatened tariffs on all Mexican imports.

Trump tweeted late Friday that the 5% tariff he threatened to impose on Mexican imports beginning today has been "indefinitely suspended."

"I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended," he tweeted.

Details of the deal announced by the State Department indicated Mexico will take unprecedented steps to increase enforcement to curb irregular migration, including deploying 6,000 troops from its newly formed National Guard to its southern border.

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