- Oil has rallied in the new year, with a nine-day run of
gains for WTI, its best run since 2010.
- Brent crude is also rallying, if those contracts close
up today — a 10th consecutive session — it would be the
futures’ best streak for 30 years.
- Traders have been buoyed by positive sentiment out of
US-China trade war talks and efforts by Saudi Arabia and OPEC and
others to stabilize markets, after plunging last
- “The market [is] returning to some sort of order,
having previously been out of whack,” said Stephen Innes, head of
trading for Asia Pacific at futures brokerage
- Brent crude is up 0.6% as of 8.55 a.m in London (3.55
The wobbles in stock markets have been grabbing all the
attention lately, but meanwhile, oil is enjoying a stunning rally
into the new year.
Oil traders are factoring in an improvement in US-China trade
relations and continued efforts by OPEC and others to stabilize the
market after a brutal end to last year.
Brent crude futures are now trading up for their 10th
consecutive day, which would mark its best
performance since the introduction of futures contracts in June
1988. This week’s performance has seen Brent rise 8.4%, its best
weekly gains for over two years as improved sentiment boosts the
Fore WTI, the US benchmark, oil has risen 24% since hitting a
low on Christmas eve.
“The macro drivers of prices has been the more dovish Federal
Reserve and better news coming out of the US-China trade dispute,”
Stephen Innes, head of trading for Asia Pacific at futures
brokerage Oanda, sadi in an interview. “The market is reading
between the lines that any deal would boost China’s economy and
really improve demand.”
US trade representatives were in China for talks earlier this
week, which raised hopes of a trade deal that would have a positive
impact on oil prices.
Similarly, last December’s “OPEC+” summit in Vienna brought a
round of supply cuts to the oil market, which are now finally being
priced in amid a greater risk-on atmosphere. Despite that prices
are still around 30% lower than their October highs.
Saudi Arabia’s energy minister, Khalid Al-Falih, said that
pledged reductions of 1.2 million barrels a day are “more than
sufficient to balance the market.” Data out of Saudi Arabia
supports the proposed axe in supply and demonstrated a cut in
exports to the US with inventory figures also broadly
Investor sentiment has also been boosted by comments from the
Federal Reserve. Fed Chairman Jerome Powell and Richard Clarida
have said that the central bank will be cautious about pushing
ahead with future rate hikes after raising interest rates four
times last year.
Brent crude is trading up 0.6% as of 8.55 a.m in London (3.55
a.m EST) while WTI is up 0.9%.
Source: FS – All – Economy – News
Oil set for the longest winning streak in 30 years as traders bask in improved US-China sentiment