Houston Chronicle


Oil gained as the U.S. and China were moving closer to a trade deal and before OPEC+ decides on its output-cut policy later this week.

Oil rallies on renewed trade deal prospects before OPEC+ meeting- oil and gas 360

Source: Houston Chronicle

Futures added as much as 1.8% in New York. The U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said. That came after U.S. crude inventories were reported to have fallen and before the OPEC+ meeting later this week.

Oil has been rising since early October on optimism the U.S. and China are close to a initial deal. The likelihood that OPEC and its allies will extend production cuts and toughen compliance, together with some signs that they could deepen them, has also helped to keep prices aloft this week.

“Overall we have seen an increased appetite for re-entering long positions but at this stage we maintain the view that Brent will struggle to break away from its low $60’s range for the foreseeable future,” says Ole Hansen head of commodities strategy at Saxo Bank A/S. “The dump and pump action continues with trade talk focus overshadowing news from Vienna.”

West Texas Intermediate for January delivery climbed 95 cents, to $57.05 a barrel on the New York Mercantile Exchange as of 10:26 a.m. in London. Brent for February settlement added $1.16, to $61.98 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.04 premium to WTI for the same month.

People familiar with the trade talks said that U.S. President Donald Trump’s comments Tuesday downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling, as he was speaking off the cuff.

Analysts surveyed by Bloomberg expect the EIA — which will release data later Wednesday — to report a 1.5-million barrel decline in U.S. crude inventories, according to the median estimate. That would be the first drop in six weeks.

 


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