Oil prices have remained steady close to three-month highs as trade deals between the US and China, which weighed on the global economic growth outlook, eased.
Brent futures LCOc1 increased $0.06 to $66.60 a barrel, while US West Texas Intermediate (WTI) crude CLc1 dipped $0.06 at $61.12 a barrel, reported Reuters. The progress in trade dispute between the world’s two biggest economies has demonstrated higher energy demand in 2020.
Data released by the Energy Information Administration (EIA) showed a 1.1 million barrels fall in US crude inventories to 446.8 million barrels in the week ending 13 December 2019.
Meanwhile, China listed out six oil and chemical products from the US import tax exemptions days after both the nations have announced an interim trade deal which is expected to be signed in January.
ANZ Research said in a note: “A world with less uncertainty (following last week’s proposed US-China trade agreement) was the real driver of the market optimism on the 2020 outlook.”
The Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, also known as OPEC+ group, have agreed to further make production cuts of 500,000 barrels per day (bpd) from January on top of earlier reductions of 1.2 million bpd.
AxiTrader market strategist Stephen Innes was quoted by Reuters as saying: “Crude prices continued their stellar performance into year-end, nudged along by the more benevolent inventory data published by the EIA.
“Product demand is up, and with a more constructive global growth outlook than at any time of this year, oil markets remain supported by the fundamental backdrop.”
Investors are also awaiting weekly drilling report from energy services firm Baker Hughes which is due to be released today.