Futures for crude oil jumped today, climbing about 2% during the trading session. There were several reasons for the commodity’s rally.
One of such reasons were hopes for an extension of OPEC+ oil production cuts. The Organization of Petroleum Exporting Countries together with the group of oil producers led by Russia, jointly known as OPEC+, agreed to reduce their oil output to buoy oil prices. Such a move was indeed helpful for supporting crude. According to OPEC sources cited by Reuters, the OPEC and its allies are planning to extend the deal to cut production till June 2020. Under the current agreement, the deal expires in March.
Another factor helpful to crude was optimism for a trade deal between the United States and China. China’s officials voiced their hopes for a “
China’s plans for reforming state enterprises, opening up the financial sector, and enforcing intellectual property rights — issues which are at the core of U.S. demands for change in China’s economic system.
But complicating the matter was the legislation supporting Hong Kong protesters that US President Donald Trump should sign soon. China considers this an intrusion in its internal affairs and strongly opposes it. The escalating tensions between the world’s two largest economies led to concerns that the deal will not be reached by the year’s end. Alleviating fears to some degree were reports that the planned US tariffs on Chinese goods that are scheduled to kick in on December 15 may not be implemented even if the deal is not reached by that time.
Futures for delivery of WTI crude oil in January climbed by $1.29 (2.26%) to $58.30 per barrel as of 18:22 GMT on NYMEX today. Brent crude jumped by $1.24 (1.99%) to $63.64 per barrel on ICE.
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