Oil Rises as U.S.-China Work to Agree on Tariff Rollbacks
Brent crude rose as much as 0.9% in London.
(Bloomberg) -- Oil rose as China and the U.S. made progress in resolving the protracted trade dispute that’s undermined demand for fuels to run trains, trucks and airplanes in the world’s two largest economies.
Futures advanced 1.4% in New York on Thursday. Chinese and U.S. negotiators agreed to roll back tariffs in phases as they work toward a settlement. U.S. stocks hit records earlier in the day, adding to signs that the slump in global growth might have bottomed.
The rise in oil and the stock market “linked to good trade news and economic optimism which should keep prices firm” for the day, said Tom Finlon, director of Energy Analytics Group Ltd in Wellington, Florida.
Oil still is down about 14% from its late April peak on concern that sluggish demand and swelling supplies from the U.S. and elsewhere will tip the market into oversupply. U.S. crude inventories surged by 7.9 million barrels last week, almost four times more than analysts forecast.
See also: WTI to Stay at $50-$60 Amid U.S.-China Trade Delay: Mizuho
WTI for December delivery gained 80 cents to close at $57.15 a barrel on the New York Mercantile Exchange. Earlier, the futures touched $57.88, the highest intraday price since Sept. 24.
Brent for January settlement climbed 55 cents to end the session at $62.29 on the ICE Futures Europe Exchange. The global benchmark crude traded at a $5.14 premium to West Texas Intermediate for the same month.
“We are seeing a decent comeback in the oil market today after the positive trade news,” said Jens Naervig Pedersen, a senior analyst at Danske Bank A/S in Copenhagen. “The oil market is in a better state than two weeks ago, but we are still in a fragile environment, where it won’t take a lot to tip the scale in a negative direction again.”
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To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Mike Jeffers, Joe Carroll
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