Oil prices firm on hopes for US, China trade deal

Sydney: Oil prices rose on Monday as Washington and China appeared to edge closer to a trade deal, dampening fears over the outlook for global economic growth.

International Brent crude oil futures were at USD 67.26 a barrel at 0005 GMT, up 14 cents, or 0.2 per cent, from their last close. They ended on Friday little changed after touching their highest since Nov 16 at USD 67.73 a barrel.

US West Texas Intermediate (WTI) crude futures were at USD 57.38 per barrel, up 11 cents, or 0.2 per cent, from their last settlement. WTI futures climbed 0.5 per cent on Friday, having marked their highest since Nov 16 at USD 57.81 a barrel.

“Crude prices continue to be supported on optimism a trade deal will be reached in the coming days by the world’s two largest economies, said Edward Moya, senior market analyst, OANDA.

President Donald Trump said on Sunday he would delay an increase in US tariffs on Chinese goods scheduled for later this week thanks to progress in trade talks and said if progress continued, he and Chinese President Xi Jinping would seal a deal.

Signs of reduced global oil supply also supported crude prices.

US energy firms this week cut the number of oil rigs operating for the first time in three weeks week after US crude production hit an all-time high, boosting exports to a record-peak and stockpiles to their highest in over a year.

Meanwhile, Mexico’s Pemex produced 1.62 million barrels of crude per day in January, less than any month in almost three decades, the state-owned oil company said on Friday, underscoring the challenges facing a government that vows to pump far more in a few years.