Oil price surges 5pc on trade truce

Yorkshire Post - Business - - MARKET REPORT -

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.

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