Oil climbs on supply curbs, US-China trade deal hopes
04 March 2019
Oil prices rose as supply tightened amid output cuts by the Organisation of Petroleum Exporting Countries (Opec) and reports of US and China inching towards a trade deal, ending eight months of tariff war that slowed global economic growth.
Global benchmark North Sea Brent futures were up 80 cents at $65.87 a barrel by 1037 GMT while US West Texas Intermediate (WTI) crude futures were up 55 cents at $56.35 per barrel.
The rally was boosted by reports that the United States and China are close to ending their trade disputes.
Reports said that at the current pace of negotiations US President Donald Trump and Chinese President Xi Jinping could be signing a formal trade deal at a summit around 27 March.
The news boosted both commodity markets that were already rallying in the past two months and the stock markets.
Meanwhile, Opec oil supplies dropped to a four-year low in February with Venezuelan output registering a further involuntary decline despite top exporter Saudi Arabia and its allies increasing deliveries.
Oil prices have already been on the boil with the US sanctions against major oil producers Iran and Venezuela.
The shale oil boom in the United States, which has seen crude output rise by more than 2 million bpd since early 2018 to more than 12 million bpd, did not help arrest rising oil prices.
Asian shares also gained from the smoothening of the US-China trade friction and the end of their protracted trade war.
Dollar eased gains as traders wagered Federal Reserve policy would remain accommodative.