By Adedapo Adesanya
Oil rose on Thursday, pushed by the US-China trade deal signing on Wednesday and another fresh trade deal among the US and neighbouring countries, returning the commodity to the green territory after staying staying down previously.
Brent crude was up 56 cents or 0.88 percent to $64.56 per barrel on Thursday night, while the US West Texas Intermediate (WTI) crude rose by 1.1 percent or 63 cents to settle at $58.44 per barrel.
On Wednesday, United States and Chinese negotiators met in Washington DC and signed the Phase 1 trade deal that calls for the world’s largest importer, China to buy $50 billion more of US oil, liquefied natural gas and other energy products over two years.
The signing will mark the formal end of 18 months of a tariff war between the US and China, bringing some relief the global oil market that affected demand and the economy.
But the deal was met with many criticisms as analysts warned that China might struggle to meet the target and oil prices could not be stable until more details emerge about the deal.
On Thursday, another major trade deal created optimism that demand will increase in 2020. This time, it followed approval of the US-Mexico-Canada (USMCA) trade agreement backed by the US Senate which will reestablish the 26-year-old North American Free Trade Agreement.
This development comes a day after President Donald Trump of the US signed the trade deal with China, and shortly before the Senate formally began his impeachment trial on charges that he abused his power, as this helped to support prices.
However, prices would have been supported higher but reports from the International Energy Agency (IEA) put up pressure when it noted that there was an expectation of oil production to be more than demand for crude from the Organization of the Petroleum Exporting Countries (OPEC), even if members comply fully with a pact with Russia and other non-OPEC allies to curb output.
The report, however, said that the rise in oil production from non-OPEC countries led by the United States along with abundant global stocks will help the market against any possible political inclined tension such as the US-Iran issue which brought about gains but fear of a drop in supply.
The report, while forecasting the 2020 outlook, projected a demand growth of 1.2 million barrels per day to total demand of 101.5 million barrels per day.
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