Oil prices rise on trade deal hopes, supply cuts
SINGAPORE: Oil prices rose on Monday, buoyed by output cuts by producer club Opec and reports that the United States and China are close to a deal to end a bitter tariff row that has slowed global economic growth.
International Brent futures were at $65.25 a barrel at 0713 GMT, up 18 cents, or 0.3 per cent, from their last close. US West Texas Intermediate (WTI) crude futures were at $55.94 per barrel, up 14 cents, or 0.3 per cent.
The rally followed reports that the US and China are close to ending their year-long trade dispute.
The two countries appear close to a deal that would roll back US tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on US goods, a source briefed on negotiations said. Hopes of an end to the trade spat between the two world’s biggest economies added support to a market that has been rallying for the past two months on cuts to production.
The “substantive progress” China and the United States have made in their trade talks has been “well-received” in both countries and around the world, a senior Chinese official said on Monday.
Supply from the Organization of the Petroleum Exporting Countries (Opec) fell to a fouryear low in February, a survey found, as top exporter Saudi Arabia and its allies over-delivered on the group’s supply pact while Venezuelan output registered a further involuntary decline.
“Opec exports are off by over 1.5 million barrels per day (bpd) since November,” Barclays bank said in a note released on Sunday.
“The supply picture looks generally tighter this year,” said energy analysts at Fitch Solutions in a note on Monday, adding they expected Brent to average $73 per barrel in 2019.