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Oil prices jump more than 2% on trade talks optimism, OPEC cuts

These are the first face-to-face meetings between officials from the two countries since Trump and Jinping agreed on a 90 day truce in trade war on December

Reuters 

OMC, oil
Representative image

rose more than 2 percent on Tuesday, supported by hopes that demand may rise more quickly if talks between U.S. and Chinese officials resolve the trade dispute between the world's two biggest economies.

U.S. Intermediate (WTI) climbed $1.22, or 2.5 percent to $49.74 a barrel by 12:25 p.m. EST (1725 GMT). The contract earlier touched a session high of $49.95, the most since Dec. 17.

futures rose $1.32 a barrel, or 2.4 percent, to $58.65.

"The trade situation is definitely bullish; you have a good demand construction if we can wrap up this trade deal," said Bob Yawger, at in

The talks are going well so far and will continue on Wednesday, U.S. delegation member said.

These are the first face-to-face meetings between officials from the two countries since U.S. and Chinese agreed in December to a 90-day truce in a trade war that has buffeted global financial

On Monday, U.S. and China's foreign ministry expressed optimism on resolving the dispute.

Some analysts warned, however, that tensions could flare anew.

also worried that a possible worldwide economic slowdown could dent fuel consumption. The hedge fund industry has cut significantly its bullish positions in crude futures.

Ratings said it had lowered its for 2019 by $10 per barrel to $55 for Brent and $50 per barrel for WTI.

"Our reflect slowing demand and rising supply globally," said Ratings

vs US Shale

Crude prices have been buoyed by supply cuts from the Organization of the Exporting Countries including top exporter Saudi Arabia, and allies including

Saudi-based Arab Investments Corp, which funds projects, estimated that are likely to trade at $60 to $70 per barrel by mid-2019.

Still, U.S. is surging. A steep rise in onshore shale drilling has helped make the the world's top producer, with crude production up 2 million barrels per day (bpd) last year to a world record 11.7 million bpd.

The market is closely watching U.S. supplies, which analysts expect pulled back 3.3 million barrels in the latest week. If government data on Wednesday confirms that forecast, it would send a strong bullish signal to the market, said John Kilduff, a at Management in

First Published: Tue, January 08 2019. 23:34 IST
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