Oil gains 1pc as China pushes Trump for more tariff roll-backs

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NEW YORK: Oil prices rose more than 1pc on Tuesday on hopes for a US-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports.

Brent crude LCOc1 futures for January delivery rose 88 cents, or 1.4pc, to $63.01 a barrel by 10:51 a.m. EST (1551 GMT). US West Texas Intermediate (WTI) crude CLc1 futures rose 76 cents, or 1.3pc, to $57.30 a barrel.

China is pushing US President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would help to ease the broad economic impact of the trade dispute between the world’s two biggest oil consumers.

“While such a development could accommodate a signing of a Phase 1 deal that would allow for a further increase in risk acceptance and hence, bullish spillover from the equities and into the oil complex, a major long term agreement still appears elusive well into next year,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.

OPEC Secretary-General Mohammad Barkindo said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts.

The Organization of the Petroleum Exporting Countries (OPEC) also said it would supply a diminishing amount of oil in the next five years as output increases from US shale deposits and elsewhere.

OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook.

Investors are also awaiting US inventory data due later on Tuesday, with official government data to be released Wednesday.

US crude oil inventories were forecast to have risen last week, while refined products stocks are likely to have declined, a preliminary Reuters poll showed on Monday.

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