By Adedapo Adesanya
Prices of crude oil at the global market increased on Tuesday after five consecutive days of losses. The gains posted yesterday was helped by the optimism of a signing of phase one of a trade deal between the United States and China today.
The market, which had fallen as Middle East tensions eased, picked up on Tuesday as the two world’s largest economies get set to sign the first phase of a trade deal that put aside an 18-month trade war that affected world economy.
At Tuesday night, the Brent crude gained 41 cents or 0.64 percent to trade at $64.61 per barrel, while the US West Texas Intermediate crude futures rose 25 cents or 0.43 percent to tradeat $58.33 per barrel.
The signing will mark a major step in ending a dispute that has cut global growth and dented demand for oil, affecting key economies especially oil dependent nations like Nigeria.
Investors will also be banking on this and any development that can push prices up, but the major lookout is for the trade signing expected to take place in Washington DC.
The trade deal details, which are not yet fully disclosed, may see China buy more than $50 billion in energy supplies from the United States over the next two years.
It is expected that the deal may also include an expansion of US food, agriculture and seafood product exports as well as an agreement by China to end its long-standing practice of forcing or pressuring foreign companies to transfer their technologies to Chinese companies.
However, data showed that despite the trade dispute between the country and the United States, China’s crude oil imports in 2019 rose 9.5 percent from the previous year, setting a record for a 17th straight year as demand growth from new refineries propelled purchases by the world’s top importer.
Prices were supported by expected drops in crude oil inventories which reportedly may have declined by 0.8 million barrels last week, January 10. The poll was conducted ahead of original data expected from the American Petroleum Institute (API), an industry group, on Tuesday, and the Energy Information Administration (EIA) on Wednesday.
Prices are expected to keep up the trend into Wednesday when the signing will take place between Chinese Vice Premier, Liu He and President Donald Trump of the United States.
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