Oil extended gains on Friday, reached 3-month highs as the U.S. and China stepped closer to a settlement of the 18-month trade war between the world’s two largest economies that deteriorated strongly global demand for oil.
Crude rates managed to touch 3-month highs on Friday with Brent international benchmark gaining 0.95 percent, to $64,81 per barrel and U.S. light WTI crude rising by 0.74 percent, to $59,62 per barrel at 8.43 GMT.
The additional support oil rates got from weak dollar, as it eased by 0.60 percent against the basket of its main 6 rivals, to 96,82 at 8.45 GMT.
While a trade deal conclusion may end the uncertainty, which in its turn could provide a solid support for oil market in the near term, worries continue to loom over demand outlook amid ample supplies going up.
Looking further ahead, an IEA report released on Thursday showed future pressure on crude prices, predicting a strong rise in global stocks despite an OPEC and its allies agreement which presupposed the deepening of output cuts.
One should not exclude the other risks for global oil glut, as for example Norway’s oil output in November reached a 32-month high at 1.71 million bpd, according to the Norwegian Petroleum Directorate data.
In the meantime, Trump administration agreed to take away some tariffs on goods from China and diminish others in return for Beijing’s pledge to increase purchases of U.S. farm products next year, sources told on Thursday.
But from the other side the White House had not released yet any official statement, the fact, that raised questions about whether the conditions were agreed by both sides.