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.

Crude Advances as U.S., China Close in on Healing Trading Rift

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.

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.

Other oil-market news:
  • Gasoline futures climbed 1.1 percent to $1.7490 a gallon.
  • Libya’s biggest oilfield could resume production within hours after the departure of the armed group responsible for its shutdown, the state-run oil company said. 
  • U.S. weekly imports of gasoline from Europe last week hit their lowest since late 2017, customs and ship-tracking data compiled by Bloomberg show.

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