FILE PHOTO: A view of a drilling rig and distant production platform in the Soldado Field off Trinidad’s southwest coast in this September 10, 2011. REUTERS/Andrea De Silva/File Photo
May 10, 2019
By Aaron Sheldrick
TOKYO (Reuters) – Oil prices rose more than 1 percent on Friday amid renewed optimism that a trade deal could be struck between Washington and Beijing, calming fears that a protracted tariff war would harm global economic growth.
Brent crude futures were at $71.11 a barrel at 0217 GMT, up 72 cents, or just over 1 percent, from their last close. Brent closed little changed in the previous session.
U.S. West Texas Intermediate (WTI) crude futures were at $62.38 per barrel, up 68 cents, or 1.1 percent, from their previous settlement. WTI ended the last session down 0.7 percent.
Analysts and traders said oil was drawing support on renewed hopes for a China-U.S. trade deal after U.S. President Donald Trump said he received a “beautiful letter” from Chinese President Xi Jinping.
Trump quoted the letter as saying: “Let’s work together let’s see if we can get something done.”
“Right now, the market is extremely headline driven, or rather tweet-driven,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney, referring to Trump’s use of Twitter to express his views or release news.
He noted that volumes were about double the average for the usually quiet Asian trading session.
Most commodities were higher, while Chinese shares and the yuan gained as the optimism flowed into Asian trading.
Still, traders remained on edge as Washington prepares to go ahead with plans to hike tariffs on hundreds of billions of dollars of goods imported from China at 12:01 a.m. EDT (0401 GMT) on Friday.
The trade optimism comes amid efforts by the Organisation of Petroleum Exporting Countries to crimp supply, as well as expectations that demand will rise.
The U.S. Energy Information Administration expects global oil demand to rise by 1.4 million barrels per day this year.
(With additional reporting by Colin Packham in SYDNEY; Editing by Simon Cameron-Moore and Joseph Radford)
