By Adedapo Adesanya
The Brent Crude, the global benchmark, traded up to $64 per barrel on Thursday, November 21, 2019 as oil price gained following fresh optimism over US-China trade deal as China invites US negotiators.
The deal, which was described by US President Donald Trump as the “phase one” deal, would put in motion settlements to a long lasting trade war that had seen both countries place tariffs on goods.
Brent crude futures, as at the time of this report on Thursday night, was trading close to the $64 mark after it gained $1.59 or 2.25 percent to sell at $63.99 per barrel.
In the same vein, the US West Texas Intermediate (WTI) crude gained $1.60 or 2.81 percent to exchange close to $59 at $58.61 per barrel.
Meanwhile, earlier in the day, prices of oil had fallen, but the news helped elevate weak oil prices.
Also, giving oil price a solid gain was reports that OPEC and its allies were likely to extend output cuts till June 2020 when they meet next month in Vienna with non-OPEC producer Russia to discuss output cut measures.
The oil market, which relied heavily on events concerning the US and China trade war, quickly picked when The Wall Street Journal (WSJ) said sources confirmed that China’s chief trade negotiator has invited his American counterparts for a new round of face-to-face talks.
Ahead of its December 5-6 meeting to review output cuts in Austria, the Organization of the Petroleum Exporting Countries (OPEC) deeper cuts were unlikely.
There are, however, recommendations that a better compliance with existing curbs could be sent to producers so as to assist the oil market.
Business Post reported on Wednesday that Russia’s President Vladimir Putin said Russia was dedicated to working with the OPEC alliance to keep the oil market balanced and predictable, adding that the non-OPEC ally would continue to cooperate under a global deal cutting oil supply.
Going into Friday, oil price may take a hit on the US-China deal with President Donald Trump set to sign two bills passed by Congress intended to support protesters in Hong Kong, which may mar potential trade relationship due to China’s national interest.
Dipo Olowookere