Oil prices creep higher on tentative U.S.-China hopes

04 Nov, 2019 - 16:11 0 Views
Oil prices creep higher on tentative U.S.-China hopes Presidents Donald Trump and Xi Jinping

eBusiness Weekly

LONDON – Oil prices crept upwards on Monday, with Brent reaching its highest in more than a month after the previous day’s boost from growing expectations of a U.S.-China trade deal.

Brent crude futures for January LCOc1 rose 69 cents to $62.38 a barrel by 1127 GMT, erasing earlier losses and reaching peaks last seen on Sept. 27. December U.S. crude futures CLc1 also swung back into positive territory, up 53 cents at $56.73 a barrel.

Chinese President Xi Jinping and U.S. President Donald Trump have been in continuous touch through “various means”, China said on Monday, when asked when and where the two leaders might meet to sign a trade deal.

On Friday prices jumped by about $2 a barrel after U.S. officials said a deal could be signed this month.

“For all of Friday’s feel-good factor, there is no guarantee that they will put pen to paper before the end of the year. This could be problematic, given that U.S. tariffs planned for Dec. 15 remain on the table,” PVM analysts said in a note.

Capping gains, euro zone factory activity contracted sharply last month as demand was dented by the trade war and continued lack of clarity over Britain’s departure from the European Union, a survey showed.

“The oil market faces ample supplies with global demand almost stagnant and supplies rising from the U.S., Canada, Brazil and even the North Sea,” said Norbert Rucker, head of economics at Swiss bank Julius Baer.

“We (…) see oil prices trading around $60 per barrel in the near term and lower longer term.”

In an effort to prop up oil prices, production cuts by the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers since January have reduced oil output by 1.2 million barrels per day.

Yet Russia again fell short of its obligations under the pact, energy ministry data showed on Saturday. C-RU-OUT

OPEC’s output recovered in October from an eight-year low after a rapid rebound in Saudi Arabia’s production from attacks on its oil infrastructure in September, offsetting losses in Ecuador and voluntary cuts under the pact.

Saudi Aramco finally kick-started its initial public offering on Sunday, but valuations vary by more than $1 trillion, according to fund managers.

Meanwhile, Abu Dhabi’s Supreme Petroleum Council on Monday approved the launch of a new pricing mechanism for Abu Dhabi National Oil Co’s flagship Murban crude. – Reuters


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