Oil prices edge up on trade talk hopes and OPEC cuts

  • Oil prices edge up on trade talk hopes and OPEC cuts

Oil prices edge up on trade talk hopes and OPEC cuts

Brent crude futures crude oil price also increased by 27 cents as it reaches $57.33 per barrel.

Oil prices rose yesterday amid hopes of a breakthrough in the US-China trade row, even as analysts slashed their price forecasts for the year ahead. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.56 to $49.52 a barrel, a 3.3 percent gain. Oil futures have gained more than 7 percent since last Monday.

John Kilduff, founding partner at energy hedge fund Again Capital, the oil market jumped all over because of the cuts.

The oil prices are drawing support from an agreed supply cut by the Organization of the Petroleum Exporting Countries, as well as some non-member countries such as Russian Federation and Oman.

Since the turn of the year investors holding oil have been helped by Opec's output cuts. He also said that the Saudis are just aggressive about trying to clean up the situation they fell into from oversupplying the market based on the fear of Iran sanctions. The change in assumptions come after Brent plunged from a peak of United States dollars 86 a barrel in early October to briefly trade below USD 50 a barrel at the end of December.

"When stock markets are strong oil usually follows suit", PVM Oil Associates strategist Tamas Varga said. -China trade tensions. The company's shares dropped 10 percent after the disclosure. Traders are also expecting that the decision of OPEC and some non-OPEC members including Russian Federation to reduce crude output by 1.2 million barrels per day from this month will significantly alter supply - demand imbalance in the market.

Goldman Sachs downgraded its 2019 crude oil price view, but forecast a recovery from present levels in the absence of a "large" global economic slowdown and improving fundamentals along with signs of major producers trimming their production.

"Crude oil prices continued to march higher, with investors becoming increasingly confident that the OPEC cuts would tighten the market", ANZ said.

However, despite Trump's intervention, oil has gained almost 12 per cent since last Monday, its biggest week-on-week rally since early December 2016.

American crude stockpiles probably declined by 1.75 million barrels last week, according to a median estimate in a Bloomberg survey of analysts ahead of U.S. government data today.

Crude oil reversed early gains on Monday after Goldman Sachs downgraded its oil price forecasts for 2019, citing a surge in global production and surprisingly resilient USA shale growth.