Oil has rallied about 23% this year as the Organisation of Petroleum Exporting Countries and allies curtailed output
Oil rose for a fifth session as fresh evidence of OPEC production cuts tempered concern about the demand implications of global trade standoffs.
Futures rose as much as 1.3 percent on Tuesday in New York. A US government official said trade talks with China were accelerating as a March 1 deadline approaches.
Meanwhile, the European Union vowed a swift response if America targets automobile imports. On the supply side, Saudi Arabia is slashing crude exports.
Oil has rallied about 23 percent this year as the Organisation of Petroleum Exporting Countries and allies curtailed output, while American sanctions on Venezuela and Iran threatened supplies further.
Still, signs of slowing economic growth and record US crude production have weighed on sentiment. Even as US oil prices gained on Tuesday, Brent, the global benchmark, slipped as much as 1.4 percent.
Traders “are focusing more on the trade talks right now,” said Scott Bauer, chief executive officer of Prosper Trading Academy in Chicago. “But we know all it takes is one tweet or one headline to turn that around, so I don’t think that volatility is going to go away any time soon.”
West Texas Intermediate for March delivery, which expires Wednesday, rose 13 cents from Friday’s closing price to $55.72 a barrel at 10:52 a.m on the New York Mercantile Exchange. Monday’s transactions will be booked Tuesday for settlement because of the US President’s Day holiday. The more-active April contract gained 9 cents to $56.07.
Brent for April settlement fell 50 cents to $66 on the London-based ICE Futures Europe exchange. The contract was at a $10 premium over WTI for the same month.
While high-level meetings in Beijing last week made little obvious progress, US President Donald Trump called them “very productive” and has said he’s willing to delay additional tariff increases as long as there’s movement toward a “real deal.” Chinese trade negotiators headed back to Washington for more talks starting Tuesday.
Tanker tracking firm Kpler estimated Saudi oil exports fell to 6.2 million barrels a day in the first half of this month, lower than the level of 6.9 million barrels indicated by Energy Minister Khalid Al-Falih for March. It’s less likely the kingdom will be able to revive shipments, given production at its largest offshore field Safaniyah is curtailed, Kpler said.