Oil Futures Gain on Progress in US-China Trade Agreement
WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange edged higher in afternoon trade Thursday. The U.S. and international crude benchmarks advanced to their highest settlement since mid-September, fueled by continued progress on a trade deal between the United States and China that has fueled bullish sentiment for global economic growth and oil demand in 2020.
NYMEX February contract gained $0.33 to a $61.18 per barrel (bbl) settlement, with the January contract rolling off the board at $61.22 bbl. ICE February Brent moved up $0.37 at $66.54 bbl. NYMEX January ULSD futures advanced 0.92 cents to $2.0295 gallon and the January RBOB contract surged 2.3 cents to a three-month spot high settlement at $1.7068 gallon.
Crude futures are on track for a third consecutive weekly rise, feeding on this month's announcements of deeper production cuts by Organization of the Petroleum Exporting Countries and the phase one trade deal between the United States and China. Both developments raise optimism for a more balanced supply/demand disposition next year, buoying the bullish outlook for oil prices. Adding further support was China's announcement that it would resume purchases of six chemical and petroleum products from the United States in 2020, indicating both countries follow through on their agreement to boost bilateral trade flows.
Beijing also announced it would soon unveil the second list of American products exempt from taxes.
According to various reports, U.S. President Donald Trump is aiming to reach a full comprehensive deal before the 2020 presidential elections.
Meanwhile, deeper production cuts coming from OPEC and 10 partners, a group known as OPEC+, continued to underpin support for oil prices.
OPEC+ has cut production by 1.2 million barrels per day (bpd) throughout the year and will make further curbs of 500,000 bpd starting from Jan. 1, with Saudi Arabia volunteering to cut another 400,000 bpd of output.
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