Crude oil prices climbed Tuesday after five days of declines, as the U.S. and China prepare to sign a “Phase 1” trade deal today, and as Middle East tensions eased, Kallanish Energy reports.
Brent crude gained 31 cents, or 0.5%, to trade at $64.51 per barrel. U.S. West Texas Intermediate crude futures rose 15 cents, or 0.3%, to settle at $58.23/Bbl.
That put WTI front-month futures on track to close below the second month for the first time since Nov. 19, a situation known as contango.
In addition, oil also found technical support after WTI fell to a more than five-week low of $57.72/Bbl before bouncing off the 200-day moving average.
The outlook for oil demand was supported by the expected signing of an initial phase U.S.-China trade agreement today, marking a major step in ending a dispute that has cut global growth and lowered demand for oil.
China has pledged to buy more than $50 billion in energy supplies from the U.S. over the next two years, a source briefed on the trade deal told Reuters.
Despite the trade dispute, China’s crude oil imports in 2019 surged 9.5% from the previous year, setting a record for a 17th straight year, as demand growth from new refineries propelled purchases by the world’s top importer, data showed.
However, gains were limited as concerns about possible supply disruptions eased due to a decline in tensions in the Middle East.
The recent declines came as investors unwound bullish positions built after the recent killing of a senior Iranian general in a U.S. air strike which sent oil prices to a four-month high earlier this month, said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.
“As geopolitical tensions take a back seat for now, we may see more of the same in the short term,” Tchilinguirian told the Reuters Global Oil Forum.
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