Oil traded above $65 a barrel as easing fears of a global trade war offset concerns over rising U.S. crude stockpiles, boosting prices to near the highest level this year.

Futures in New York were up 0.1 percent after closing 0.5 percent lower on Monday. A resurgence in risk appetite has helped lift markets from global equities to commodities after a report the Trump administration is to be urging China to lower tariffs as part of talks to resolve rising trade tensions. Still, concerns over American shale oil remain, with analysts forecasting a gain in U.S. crude inventories last week.

Oil has recovered to near recent highs seen in January after President Donald Trump appointed John Bolton as national security adviser, signaling the U.S. may pursue a more hard-line approach against Iran and disrupt outflows from the OPEC member. While global stockpiles are tightening in a sign that the Organization of the Petroleum Exporting Countries and its allies’ production cuts are working, fears still remain that surging U.S. production could thwart those efforts.

“The market is reacting to news that global trade war tensions are easing and geopolitical risks are escalating, but that doesn’t mean concerns have diminished over rising U.S. output and supplies,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul. “Uncertainties still linger and that will pressure prices from going up further.”

West Texas Intermediate crude for May delivery traded at $65.61 a barrel on the New York Mercantile Exchange, up 6 cents at 3:03 p.m. in Singapore. The contract fell 33 cents to $65.55 on Monday. Total volume traded was about 21 percent below the 100-day average.

Shanghai Futures

Brent for May settlement rose 4 cents to $70.16 a barrel on the London-based ICE Futures Europe exchange. Prices dropped 33 cents to close at $70.12 a barrel on Monday. The global benchmark traded at a $4.56 premium to WTI.

In China, yuan-denominated oil futures declined 1.4 percent to end at 424 yuan a barrel on Tuesday. The contract for September delivery slipped on the Shanghai International Energy Exchange after closing at 429.9 yuan a barrel in its debut on Monday.

Asian equities followed their U.S. counterparts higher Trump’s administration was said to be urging China to lower tariffs on cars and open its market to U.S. financial services. Treasury Secretary Steven Mnuchin said on Fox News that he’s optimistic the U.S. can reach a truce with China on trade.

In the U.S., stockpiles were estimated to rise 450,000 barrels last week for the fourth time in five weeks, according to a Bloomberg survey before Energy Information Administration data due Wednesday. Production had also increased for a fourth week in the period ended March 16, hitting a fresh record.

Other oil-market news:

• The chief executive officer of Saudi Aramco defended prospects for an initial public offering of the giant oil company in the face of investor skepticism and government prevarication on when and where it will happen.
• Gasoline futures gained 0.1 percent in New York after settling 1.1 percent lower on Monday.