Crude Advances as U.S., China Close in on Healing Trading Rift
(Bloomberg) -- Oil climbed as the U.S. and China were said to be near a settlement of a trade dispute that threatened to erode energy demand in the world's largest economies.
Futures in New York rose 1.4 percent on Monday. American and Chinese negotiators are close to signing an accord that would lift tariffs and usher in new intellectual-property protections, according to people familiar with the talks. Meanwhile, OPEC crude exports fell by almost 700,000 barrels a day last month, tanker-tracking consultant Kpler said in a report.
Oil has rallied about 25 percent this year as the Organization of the Petroleum Exporting Countries and allies such as Russia restrained production. Adding to the momentum over the weekend, a pipeline closure threatened crude flows from Nigeria while American oil exploration was reported to have collapsed to the lowest level since May.
“There continues to be very strong support for oil prices on the back of OPEC reducing their production,” said Howie Lee, a Singapore-based economist at Oversea-Chinese Banking Corp. “Also, if the U.S. and China manage to resolve their key differences, then we can raise the oil demand a few notches. I think there is hope.”
West Texas Intermediate for April delivery rose 79 cents to $56.59 a barrel at the close of trading on the New York Mercantile Exchange.
READ: Big Bonuses Return for Europe Energy Traders as Prices Rally
Brent for May settlement rose 60 cents to $65.67 on the London-based ICE Futures Europe exchange. The global benchmark crude's premium over WTI for the same month was at $8.70.
The number of rigs searching American fields for crude fell by 10 last week to 843, according to a Baker Hughes report. In the Permian Basin, the most prolific U.S. field, the rig fleet shrank by seven to 466.
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--With assistance from Tsuyoshi Inajima and Saket Sundria.
To contact the reporters on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net;Grant Smith in London at gsmith52@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Carlos Caminada
©2019 Bloomberg L.P.
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