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Crude Oil Jumps on US-China Truce, Anticipation of Production Cuts

December 3, 2018 at 18:00 by Vladimir Vyun

Crude oil started the week with significant gains due to a range of factors. One of such factors was the news about a 90-day truce in the trade war between the United States and China. Trade wars threaten economic growth, and demand for crude usually directly linked to growth.

Another positive factor for oil prices was the upcoming meeting of the Organization of Petroleum Exporting Countries. Experts speculated that Saudi Arabia and non-OPEC Russia will agree to prolong production cuts that were supporting prices for crude. The news that Qatar is going to leave the OPEC did not bother oil traders much as the country’s oil production is relatively insignificant, and the country mostly relies on export of natural gas.

Surprising everyone, Canada’s western province Alberta also announced production cuts. Alberta will reduce its production by 325,000 barrels per day to reduce excess reserves.

Contract for delivery of WTI crude oil in January climbed as much as 3.04% to $52.48 per barrel as of 17:45 GMT on NYMEX today. Brent crude for delivery of February advanced 2.62% to $61.02 per barrel on ICE.

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