Oil prices have hit a three-month high as the US-China trade deal appears to progress.

Brent crude futures gained $0.71 to $64.91 a barrel while West Texas Intermediate (WTI) crude climbed $0.52 to $59.70 a barrel, reported Reuters.

OANDA senior market analyst Edward Moya was quoted by Reuters as saying: “Risk appetite ran wild after Trump signalled that he made a deal with China and that will only be positive for global demand forecasts for crude.

“If we see even further progress with the US-China trade war, we could see global GDP rise by half a percentage point in 2020 and that would do wonders for crude demand forecasts.”

According to the report of International Energy Agency (IEA), a surge in global inventories is expected despite OPEC+ agreement to further deepen the output cuts. Although an official statement has not been released, sources revealed that the US has agreed to suspend some taxes on Chinese goods on certain terms.

The Norwegian Petroleum Directorate (NPD) stated that the nation’s oil output in November 2019 hit a 32-month high standing at 1.71Mbpd.

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By GlobalData

AxiTrader market strategist Stephen Innes said: “While the current (US-China) trade deal will most probably limit demand devastation, it might not be enough to counter an oversupplied market in early 2020, hence the possible reason we are not seeing a massive bounce in oil prices now.”