Crude Near Two-Month Highs

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures and the Brent contract on the Intercontinental Exchange edged higher in market-on-close trade Monday. Both crude benchmarks held near two-month highs, boosted by rallying equities as the market expects a resolution will be reached in the U.S.-China trade war.

Following back-and-forth trading for most of the session, NYMEX January West Texas Intermediate futures climbed $0.24 to a $58.01 per barrel (bbl) settlement, with the ICE January Brent contract moved up $0.26 to end the session at $63.65 bbl. NYMEX December ULSD futures advanced 1.49 cents to a $1.9443 gallon and NYMEX December RBOB futures settled up a fractional 0.05cts at $1.6748 gallon.

ICE Brent January futures contract and NYMEX December RBOB and ULSD futures will expire end-day Friday (11/29).

U.S. stock market indices hit new record highs on Monday, with investors sending Dow Jones Industrial Average 190.85 points higher and S&P 500 Index up 0.75%, boosting oil futures. The rally was spurred by potential tightening of intellectual property rights by Beijing -- a key sticking point in trade negotiations between the world's two largest economies in their 16-month long trade war.

The market views the move as a major concession to U.S. President Donald Trump that could set the stage for a breakthrough in this week's bilateral trade negotiations in Beijing.

Oil futures were also lent support by bullish data from China, detailing crude oil imports jumped 17% last month to a record high 10.76 million barrels per day (bpd), suggesting healthy demand growth in the world's second largest economy. International Energy Agency projected most oil demand growth next year would come from emerging markets in Asia.

Separately, Dallas Federal Reserve Monday released its manufacturing survey for the State of Texas, detailing continued decline in industrial activity in November, albeit at a slower pace compared to the previous three months. Chicago Fed National Activity index also declined to -0.71 last month, far below the expectations and the lowest reading since April. Both reports showed a slowing trend in economic growth this year, offering an alternative assessment of the U.S. economy. Markets await the second of three readings on second quarter U.S. gross domestic product set for release Wednesday, with expectations for a 1.9% expansion rate.

Liubov Georges can be reached at liubov.georges@dtn.com

(CZ)

Liubov Georges