Oil prices rose on Thursday following optimism of a breakthrough in the U.S-China trade agreement as well as OPEC+ decision to cooperate with OPEC on supply cuts. The Brent Crude rose by 0.4 per cent at $67.48 per barrel, while West Texas Intermediate climbed by 0.4 per cent at $61.36 PB.
According to Reuters, Chief Asia market strategist at AxiTrader, Stephen Innes said " Oil prices continue to show year-end strength supported by a combination of definitive progress on the U.S.-China trade deal, the Dec OPEC/OPEC+ agreement, and slowing shale activity,"
"All of which is pointing to a stronger performance for oil prices in Q1 than anyone had thought only two months ago."
The OPEC+ in November agreed to extend oil production cuts of up to 2.1 million barrels per day (BPD) or 2 per cent of global demand. However, U.S oil producers, particularly Shale crude have continued to supply record amounts of oil to fill supply gaps.
More so, substantial supply of oil is expected in the new year with Saudi Arabia and Kuwait agreeing to end the dispute over their Neutral Zone, which supplies about 500,000 BPD or 0.5 per cent of global demand.
Also, the President of United States, Donald Trump on Tuesday disclosed that he and President Xi Jinping of China will have a signing ceremony for the phase 1 agreement, which would lead to the end of the trade war.
This comes after a 17-month long trade war which took a toll on the economic growth and oil demand, leaving OPEC and its allies including Russia to support the market with supply cuts for most of the year.
