Oil prices rise in response to US-China trade deal hopes
Oil prices climbed higher on Monday, supported by OPEC production cuts that took effect in January and reports that the US and China are close to ending the trade war that has negatively impacted global economic growth.
Oil prices rose on Monday after news that the US and China are close to agreeing a trade deal that will end the ongoing tariff row the two countries have been embroiled in for months.
International Brent futures climbed 80 cents to $65.87 a barrel, while West Texas Intermediate (WTI) futures rose 55 cents to $56.35 a barrel on Monday morning.
US-China edge closer to ending trade war
According to media reports, the US and China are edging closer to finalising a trade deal that will end $200 billion worth of tariffs imposed on Chinese exports, with officials in Beijing looking to stop retaliatory charges on US goods.
The news that an end to the US-China trade war is imminent helped oil prices climb higher on Monday, with the market finding support at the start of 2019 after OPEC production cuts came into effect in January.
OPEC supply cuts buoy oil prices
OPEC production numbers are starting to come through, which show growing compliance with the OPEC+ deal, ING said in recent report.
The UAE reported that its production averaged 3.05 million barrels a day over February compared to its agreed level of 3.07 million barrels a day.
In fact, Bloomberg estimates that OPEC production averaged 30.5 million barrels a day over February, down 560 million barrels a day month-on-month, the report continued.
‘While much of the move higher in the market has come about due to short covering, in more recent weeks we have seen fresh longs starting to return to the market, suggesting that sentiment is turning more positive,’ ING said.
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