Oil rises above $62 on hopes for US-China trade deal

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Fri, 2019-11-08 00:12

LONDON: Oil rose above $62 a barrel on Thursday after China
hinted at progress toward a trade deal with the US, raising hopes
for an end to a long dispute that has weighed on economic growth
and demand for fuel.

China and the US have agreed in the past two weeks to cancel
tariffs in different phases, the Chinese Commerce Ministry said on
Thursday.

The trade dispute has
prompted analysts to lower forecasts for oil demand and raised
concerns that a supply glut could develop in 2020. Oil fell on
Wednesday, partly because of worries that a US-China trade deal
might be delayed.

“Today we start with a different set of headlines that they
came to some agreement on the framework,” said Olivier Jakob, oil
analyst at Petromatrix. “That is definitely what is supporting
prices.”

Brent crude, the global benchmark, rose 76 cents to $62.50 a
barrel by 1444 GMT after settling down $1.22 on Wednesday. West
Texas Intermediate crude climbed 92 cents to $57.27.

Beijing’s comments boosted market sentiment, which had also
been ruffled by Wednesday’s US government supply report showing
crude inventories rose last week by 7.9 million barrels, much more
than expected by analysts.

Brent has rallied 15 percent in 2019, supported by a deal
between the Organization of the Petroleum Exporting Counties and
allies such as Russia to limit supplies until March next year. The
producers meet on Dec. 5-6 in Vienna to review the policy.

OPEC Secretary-General Mohammad Barkindo said this week he was
more optimistic about the outlook for 2020 because of developments
on trade disputes, appearing to downplay any need to cut output
more deeply.

Still, doubts about a trade deal could resurface, analysts said.
Reuters reported on Wednesday a meeting between US President Donald
Trump and Chinese President Xi Jinping to sign the deal could be
delayed to December, contributing to oil’s decline.

“Doubts are not yet turning into full-blown concerns,” said
Craig Erlam, analyst at brokerage OANDA. “If a date isn’t set
in stone soon though, that may come.”

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Source: FS – All-News-Economy
Oil rises above on hopes for US-China trade deal