Oil prices were stuck in a tug-of-war of competing narratives early Monday, with U.S. trade and production, alongside Middle East risk, influencing markets.

Crude oil prices rallied about 8 percent last week, largely on geopolitical risk, as U.S. President Donald Trump surrounded himself with more hawkish advisors. The appointment of former U.N. Ambassador John Bolton as his national security advisor put war on the tongue of many analysts given his support for pre-emptive strikes on North Korea and disdain for Iran.

Early Monday, U.S. State Department spokesperson Heather Nauert condemned a missile strike Sunday by Houthi militants in Yemen, who have tacit backing from Iran, against Saudi targets.

"We continue to call on all parties, including the Houthis, to return to political negotiations and move toward ending the war in Yemen," she said in a statement.

Markets last week gave the forward foot to geopolitical risk, ignoring an increase in exploration and production activity in North America. Reported by Baker Hughes as a rig counts, gains could be indicative of future production, a particular concern given the balancing effect of U.S. crude oil production.

The price for Brent crude oil, the global benchmark, was moving erratically before the start of U.S. trading. Brent was down 0.4 percent as of 9:20 a.m. EST to $69.53 per barrel. West Texas Intermediate, the U.S. benchmark, was down 0.46 percent to $65.58 per barrel.

U.S. trade policy against China last week rattled the broader markets. U.S. Treasury Secretary Steven Mnuchin said last week that Chinese trade policies are "aimed squarely at, and detrimental to, the United States."

Equities futures were lifted, however, after the secretary seemed to walk back some of the comments in a weekend interview with cable broadcaster Fox News.

"I'm cautiously hopeful we reach an agreement [with China], but if not we are proceeding with these tariffs," he was quoted as saying. "We are not putting them on hold."

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PetroChina triples its net profit, hands out big dividend
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