Adedapo Adesanya
By Adedapo Adesanya
Prices of crude oil recovered from the losses recorded earlier on Tuesday. The recovery was influenced by news that the United States and China held conversation over a potential trade agreement, which has affected oil demand globally for a while.
Earlier in the day, the International benchmark, the Brent Crude, was trading at $62 per barrel, while the US West Texas Intermediate (WTI ) crude was trading at $57 per barrel.
However, as at 9pm Nigerian Time (GMT +1), the Brent crude futures increased by 61 Cents or 0.97 percent to $63.23 per barrel, while the WTI crude rose by 42 cents equivalent to 0.72 percent to trade at 58.43 per barrel.
According to reports yesterday, the United States and China could be close to finally agreeing on the first phase of a trade deal, the U.S. President, Mr Donald Trump, was quoted as saying.
The global market, which has been swayed by the US-China trade deal, swung to action following this.
Earlier, Business Post reported that top negotiators from the both countries spoke by telephone and agreed to keep working on remaining issues that bound them.
The latest concerns occurred as the Chinese government summoned the U.S. ambassador on Monday to protest against the passage in the US Congress of the Hong Kong Human Rights and Democracy Act.
Prices also rose on the predictions for a weekly draw on U.S. crude stockpiles were expected to have declined 400,000 barrels last week ahead of results that will be released on Wednesday.
Still on the supply side, the Organization of the Petroleum Exporting Countries (OPEC) and Russia are likely to extend existing production cuts by another three months to June 2020 when they meet in December.
The group has also said it will emphasise the need for stricter deal compliance from the likes of Iraq and Nigeria who are not fulfilling the end of the January deal.
The cartel and its allies agreed to cut production output by 1.2 million barrels per day in a deal that would run till March 2020 but recently there was talks that the producers including Russia would extend this till June next year.
Oil prices are expected to keep up their gains on Wednesday if reports by the American Petroleum Institute (API) on Tuesday, and the Energy Information Administration (EIA) on Wednesday show a reduction in US crude supplies.
