NEW YORK (Reuters) – Oil prices rose on Monday to three-month highs, lifted by optimism over an expected China-U.S. trade deal and upbeat industrial data, while traders kept a close watch on the Middle East following U.S. air strikes in Iraq and Syria.
FILE PHOTO: Grandpuits oil refinery southeast of Paris, France, February 29, 2016. REUTERS/Christian Hartmann
International benchmark Brent LCOc1 reached $68.99 a barrel, while U.S. crude futures CLc1 hit $62.34 a barrel, both the highest since Sept. 17. For the year, Brent has risen around 27% in 2019, and the U.S. benchmark is up about 36%.
Futures eased during the session, with Brent crude futures LCOc1 rising 28 cents to settle at $68.44 a barrel. West Texas Intermediate (WTI) crude CLc1 futures fell 4 cents to settle at $61.68 a barrel.
White House trade adviser Peter Navarro told Fox News in an interview that the U.S.-China Phase 1 trade deal would likely be signed in the next week.
He cited but did not confirm a report that Chinese Vice Premier Liu He would visit this week to sign the deal.
“Washington has sent an invitation and Beijing has accepted it,” the South China Morning Post quoted a source as saying.
The trade war between the world’s two largest economies has hurt market sentiment around the world.
“U.S.-China trade optimism continues to spur demand for risky assets such as oil, other industrial commodities, equities,” Jim Ritterbusch, president of trading advisory firm Ritterbusch and Associates, said in a note.
In China, factory activity likely expanded again in December although markets await details on the trade truce, a Reuters poll showed.
Elsewhere, investors are closely watching events in the Middle East after the United States carried out air strikes on Sunday against the Kataib Hezbollah militia group, while protesters in Iraq on Saturday briefly forced the closure of its southern Nassiriya oilfield.
Libyan state oil firm NOC said it is considering closure of its western Zawiya port and evacuating staff from the refinery due to clashes nearby.
Looking ahead to 2020 some analysts cited abundant global crude stocks as a major obstacle to efforts to rein in output by the Organization of the Petroleum Exporting Countries and its allies such as Russia.
“Even as OPEC and its non-OPEC partners endeavor to make additional supply cuts in Q1 2020, we are not convinced this will be sufficient to avert large global inventory,” said Harry Tchilinguirian, global oil strategist at BNP Paribas.
“We remain of the opinion that oil fundamentals continue to present downside risk.”
Additional reporting by Noah Browning in London and Seng Li Peng in Singapore, editing by Louise Heavens/ David Evans/Susan Fenton/David Gregorio