By Adedapo Adesanya
Oil prices traded higher on the global market as fresh and optimistic comments concerning the trade deal discussion between the United States and China brought about a positive outlook on Thursday.
This came from President Donald Trump who said that the US was very close to having a deal with China after seventeen months of been at loggerheads. On Thursday, President Trump tweeted “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
The trade war between both countries have constantly affected oil demand and which in turn drive prices.
Following this, Brent crude, the international benchmark, traded up after gaining 1.13 percent equivalent to 72 Cents to trade at $64.44 per barrel, while the US West Texas Intermediate (WTI) crude moved up 1.02 percent equivalent to 60 Cents to close at $59.36 per barrel.
The US on the deal had reportedly offered China to roll back some existing tariffs and cancel a new round of tariffs set to take effect on December 15.
This new offer will see the US reduce some of the current tariffs by as much as 50 percent on the condition that China pledges to buy big volumes of American agricultural products, protect US intellectual property rights, and allow more access to its financial services sector.
The implication of this is that failure of both countries to reach an agreement by midnight on Sunday, the US would place tariffs on another $156 billion worth of goods that Americans imports from China, mostly consumer products such as laptops, mobile phones, toys, and clothing.
Prices were also supported based on central banks in the US and Europe decisions to keep interest rates low and maintain economic growth for the future which may help to boost the global economy and improve dwindling crude demand.
In the US, the Federal Reserve on Wednesday said its decision to hold benchmark interest rates unchanged between the range of 1.5 percent and 1.75 percent is due to worries about the outcome of the US-China trade war.
Also, on Thursday the European Central Bank announced its decision to keep its main deposit rate at negative 0.5 percent while maintaining its rate of asset purchases at €20 billion a month which tallied with expectations.
The good news around the market was also saw contribution by the optimal performance made by Saudi Arabia’s Aramco initial public offering into its second day of trading.
