Oil rises to 3-month high on upbeat data
Traders cautious of profit-taking possibilities as oil prices stay high
Oil prices rose to threemonth highs yesterday, underpinned by optimism over an expected China-US trade deal and upbeat industrial data, while traders kept a close watch on the Middle East following US air strikes in Iraq and Syria.
Brent crude futures were up 0.9 per cent at $68.75 a barrel, up 59 cents. The international benchmark has risen around 27 per cent in 2019.
West Texas Intermediate (WTI) crude futures rose 22 cents or 0.2 per cent to $61.94 a barrel by 0940 GMT. The US benchmark is up about 36 per cent so far this year.
“Oil prices have reached their highest level since the Saudi oilfield attack in mid-September”, said market analyst Margaret Yang of CMC Markets.
Despite a the relatively low price gains despite an array of bullish factors, Yang added: “Traders are also cautious about profit-taking possibilities.” Tensions in the Middle East have flared up as the United States carried out air strikes yesterday against the Kataib
Hezbollah militia group, while protesters in Iraq on Saturday briefly forced the closure of its southern Nassiriya oilfield.
Factory activity
Oil prices were also supported by declining US crude stocks, which fell by 5.5 million barrels in the week to December 20, far exceeding a 1.7-million-barrel drop forecast in a Reuters poll.
In China, factory activity had likely expanded again in December on stronger external demand and an infrastructure push at home although the pace of growth is set to ease as markets await more certainty on a US-China trade truce, a Reuters poll showed. China’s Commerce Ministry said it is in close touch with the United States on the signing of a long-awaited trade deal.