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Oil rises by over 1 percent on U.S., China trade talk optimism

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - rose by around 1 percent on Wednesday, extending gains from the previous session on hopes that and may soon resolve trade disputes that have cast a dark shadow over the global economy.

U.S. Intermediate (WTI) futures were at $50.42 per barrel at 0752 GMT, up 64 cents, or 1.3 percent, from their last settlement. That marked the first time this year that WTI has topped $50 a barrel.

International Brent crude futures were up 69 cents, or 1.2 percent, at $59.41 per barrel.

Both crude price benchmarks had already gained more than 2 percent in the previous session.

"Crude continues to extend gains as early reports from regarding trade negotiations are fueling optimism around successful trade talks between the U.S. and China," said Stephen Innes, at in

"After a dreadful December for risk markets, continues to catch a positive vibe," Innes said.

The were in line with Asian stock markets, which climbed to 3-1/2 week highs on Wednesday.

Trade talks in between the world's two biggest economies entered a third day on Wednesday, amid signs of progress on issues including purchases of U.S. farm and and increased U.S. access to China's markets.

Daily said on Wednesday that Beijing is keen to put an end to its trade dispute with the United States, but that it will not make any "unreasonable concessions" and that any agreement must involve compromise on both sides.

If no deal is reached by March 2, Trump has said he will proceed with raising tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports at a time when China's economy is slowing significantly.

Citing the trade tensions, the expects global economic growth to slow to 2.9 percent in 2019 from 3 percent in 2018.

"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead," said in a semi-annual report released late on Tuesday.

More fundamentally, however, have been receiving support from supply cuts started at the end of 2018 by a group of producers around the Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member

The OPEC-led cuts are aimed at reining in an emerging supply overhang, in part because U.S. output surged by around 2 million barrels per day (bpd) in 2018, to a record 11.7 million bpd.

from the (EIA) is due at 1800 GMT on Wednesday.

(Reporting by Gloystein; Editing by and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 09 2019. 13:27 IST
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