Oil price surges 5pc on trade truce
Oil prices jumped by more than 5 per cent on Monday after the United States and China agreed a 90-day truce in a trade dispute, Canada’s Alberta province ordered a production cut, and as exporter group OPEC looked set to reduce supply.
US light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 per cent, before easing to around $53.25. Brent crude rose 5.3 per cent, or $3.14, to a high of $62.60 and was last trading around $62.00, up $2.54.
“From Argentina to Alberta, the oil market news is about supply curtailments,” said Norbert Rucker, head of commodity research at Swiss bank Julius Baer. “A brightening market mood will likely extend the price rally in the very near term.”
China and the United States agreed during a weekend meeting in Argentina of the Group of 20 leading economies not to impose additional trade tariffs for at least 90 days while they hold talks to resolve existing disputes.
Crude oil has not been included in the list of products facing import tariffs, but traders said the positive sentiment of the truce was also driving crude markets.
Oil also received support from an announcement by Alberta that it would force producers to cut output by 8.7 per cent, or 325,000 barrels per day, to deal with a pipeline bottleneck that has led to crude building up in storage.