Oil prices rose on Monday as positive noises from Washington over the weekend rekindled hopes in global markets that the United States and China could soon sign an interim deal to end their bitter trade war, APA reports citing Reuters.
West Texas Intermediate (WTI) crude CLc1 rose 18 cents, or 0.31% to $57.95 a barrel by 0626 GMT, having ended last week little changed after tracking ups and downs in the trade talks process.
Brent crude futures LCOc1 were at $63.66, up 27 cents or 0.43%, the benchmark having also finished little changed last week.
“It is still all about trade talks,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “It seems to be dominating markets action at the moment.”
Monday’s higher opening prices came after U.S. national security adviser Robert O’Brien said on Saturday that an initial trade agreement with China is still possible by the end of the year.
This came a day after U.S. President Donald Trump and Chinese President Xi Jinping expressed a desire to sign an initial trade deal and defuse a 16-month tariff war that has lowered global growth - though Trump said he had yet to decide whether he wanted to finalize a deal while Xi said he would not be afraid to retaliate when necessary.
A move by China to protect intellectual property was also providing a supportive atmosphere for the trade talks, McCarthy added.
“This is a big step forward for potential trade negotiation if they are adopted as official policy,” he said.
Still, concern remains that events in Hong Kong, riven by months of anti-government unrest, could overshadow trade talk progress.
U.S. national security adviser O’Brien warned on Saturday that Washington would not turn a blind eye to what happens in Hong Kong, where demonstrators remain angry at what they see as Beijing meddling in freedoms promised to the ex-British colony when it returned to Chinese rule more than 20 years ago.
Over the weekend, the city’s democrats won a landslide and symbolic majority in district council elections.
A potential supply cut by OPEC+ of three more months to mid-2020 when they meet over Dec. 5-6 could also push prices up. The Organization of the Petroleum Exporting Countries meets on Dec. 5 at its headquarters in Vienna, followed by talks with a group of other oil producers, lead by Russia, known as OPEC+.
“Oil may continue its roller-coaster ride again this week ... risks remain around both trade and the imminent OPEC decision, but the latest evidence suggests expectations are more favorable for oil prices on both variables,” Stephen Innes, chief market strategist at AxiTrader, said in a note.