Oil rises, supported by trade deal, Opec cuts
[TOKYO] Oil prices rose on Thursday, buoyed by a potential breakthrough in the Sino-US trade war and Opec-led efforts to constrain supply, although trading was quiet as many markets were in holiday mode.
Brent crude was up 16 cents, or 0.2 per cent, at US$67.36 a barrel by 0155 GMT.
West Texas Intermediate was up 20 cents, or 0.3 per cent, at US$61.31 a barrel.
"Oil prices continue to show year-end strength supported by a combination of definitive progress on the US-China trade deal, the Dec Opec/Opec+ agreement, and slowing shale activity," said Stephen Innes, chief Asia market strategist at AxiTrader.
"All of which is pointing to a stronger performance for oil prices in Q1 than anyone had thought only two months ago."
US President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony for the so-called Phase 1 agreement to end their trade dispute that was put together earlier this month.
The roughly 17-month trade war hit global economic growth and demand for oil, leaving prices range-bound for the most of the year.
Lower demand also rendered supply cuts by the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia less effective in supporting the market.
The so-called Opec+ grouping agreed in November to extend and deepen production cuts that would take as much as 2.1 million barrels per day (bpd) of supply off the market, or roughly 2 per cent of global demand.
US producers, not party to the Opec+ agreement, have been pumping record amounts of oil, especially shale crude, to fill any supply gaps. Growth in production in the US is forecast by many to slow, however.
Still, more supply is coming in the new year with Saudi Arabia and Kuwait earlier this week agreeing to end a dispute over their Neutral Zone, which can supply as much as 500,000 barrels per day of oil, or about 0.5 per cent of global demand.
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Gold prices set for weekly decline ahead of US inflation data
Pricey coffee is here to stay as hoarding, heat hit Vietnam supply
Oil settles higher as weak US economic growth offset by supply concerns
India's Vedanta misses Q4 profit estimates on lower prices
BHP targets Anglo American in bid valuing miner at US$39 billion
China's Sinopec charts global expansion with refinery in rival India's backyard