FILE PHOTO: Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. Picture taken August 21, 2019. REUTERS/Jessica Lutz
December 19, 2019
By Shadia Nasralla
LONDON (Reuters) – Oil prices hovered near three-month peaks on Thursday, buoyed by falling U.S. crude inventories and thawing trade relations between the United States and China.
Brent crude futures were up 19 cents at $66.36 a barrel at 1447 GMT, heading for their sixth straight day of gains.
U.S. West Texas Intermediate (WTI) crude rose 7 cents to $61.00 a barrel. The contract for January delivery expires later on Thursday.
Trading volume was thin before the Christmas holiday with news of President Donald Trump’s impeachment by the U.S. House of Representatives failing to stir the oil market.
“A resilient performance in the coming two weeks will flip the monthly technical picture unreservedly positive for next year,” PVM oil market analysts said, although they said prices were still likely to be volatile.
Oil prices are on track for a third consecutive weekly rise, gaining momentum from this month’s announcements about deeper output cuts by major crude producers and the “Phase One” deal between Washington and China that has eased trade tensions.
The deal between the world’s two largest economies has improved the global economic outlook, lifting prospects for higher energy demand next year and underpinning oil prices.
In a further sign of thawing relations, China’s finance ministry on Thursday published a new list of six U.S. products that will be exempt from tariffs starting Dec. 26.
A week earlier, the Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia agreed to deepen production cuts by a further 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.
Adding to the positive mood, weekly data from the Energy Information Administration showed U.S. crude inventories dropped 1.1 million barrels in the week to Dec. 13, while gasoline and distillates stockpiles rose.
(Additional reporting by Florence Tan in SINGAPORE; Editing by Edmund Blair/Mark Potter/Jane Merriman)
