Oil prices rallied on Tuesday, aided by hopes of Chinese stimulus, helping to offset concerns about high supplies, traders said.

US benchmark West Texas Intermediate for delivery in July jumped $1.04 to $59.18 a barrel compared with Monday’s close.

Brent North Sea crude for July won $1.52 to $64.21 a barrel in London midday deals.

Chinese inflation fell to 1.2 percent in May, data showed Tuesday, the latest sign that growth in the world’s number two economy is stalling and suggesting more monetary easing may be on the way.

Oil prices had fallen on Monday as the market weighed last week’s OPEC meeting and the prospects for a breakthrough in upcoming nuclear talks with major oil producer Iran.

Investors continue to mull the impact on prices after the 12-nation Organization of the Petroleum Exporting Countries (OPEC) on Friday defied calls to cut output despite the big drop in crude prices since last year.

Six global powers — Britain, China, France, Germany, Russia and the United States — are meanwhile trying to nail down a deal to curb Iran’s nuclear ambitions by reducing its stockpiles of enriched uranium and mothballing some of its sites that could herald a jump in Iranian oil exports.

Source: AFP