By Adedapo Adesanya
Major oil futures gained more than one percent on Tuesday driven largely by optimism surrounding reports that the United States and China could finalize a trade agreement next month.
Following this, the price of Brent Crude, the international benchmark, traded up 1.13 percent equivalent to 74 cents to at $66.16 per barrel, while the US West Texas Intermediate (WTI) crude moved up 1.02 percent equivalent to 62 cents to trade at $61.14 per barrel.
This rise occurred as the United States President, Donald Trump said on Tuesday that he and President Xi Jinping of China will have a signing ceremony to sign the first phase of the US-China trade deal agreed to this month.
The 18-month long trade tensions between the two countries have weighed on the oil market because of worries of a slowdown in demand growth, leading to drops in oil prices but with this deal, things have experienced a change.
On Monday, Business Post reported that Russia, a member of the Organisation of the Petroleum Exporting Countries (OPEC) allied group (OPEC+) may consider easing output cuts next year. This was from an interview the Russian Energy Minister, Mr Alexander Novak, granted on Monday.
The OPEC and other top producing nations led by Russia had agreed earlier this month in Vienna to extend and deepen output cuts in the first quarter of 2020 by additional 500,000 barrels to 1.7 million barrels, but the oil market is still faced with oversupply from other non-OPEC member states such as the United States, which has a crude inventory of almost 13 million barrels per day.
As the market awaits official industry data, crude stocks, according to a poll by Reuters, are expected to have fallen for the second week by about 1.8 million barrels last week and this may help prices rise after the holidays.
The weekly government report on inventories has been delayed by two days due to Christmas with data expected on Friday.