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January 13, 2020

Oil prices rise slightly as US-Iran conflict fears ease

Oil prices have increased slightly as fears over conflict between the US and Iran eased.

By Himaja Ganta

Oil prices have increased slightly as fears over the conflict between the US and Iran eased.

Investors’ focus has now moved towards the much-awaited initial US-China trade deal scheduled for this week.

According to Reuters, Brent crude futures were up $0.20 at $65.18 a barrel. West Texas Intermediate (WTI) also rose $0.16 at $59.20 a barrel.

It also reported that oil prices have surged to their highest in almost four months. This follows the US-drone killing of an Iranian military commander.

Samsung Futures Seoul commodities analyst Kim Kwang-rae said: “The possibility of the war between the United States and Iran has disappeared … For the week, the signing of the US-China trade deal would lift oil prices on expectations for higher demand.”

Global benchmark Brent was at $71.75 per barrel last week before dropping to below $65 on Friday.

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Backwardation in Brent LCoC1-LCOc2 futures is currently at $0.73 per barrel, while the WTI backwardation CLc1-CLc2 is at $0.05 per barrel.

Energy Aspects Singapore oil analyst Virendra Chauhan said: “The fundamentals for WTI remain weak for the coming months and stocks are expected to build at Cushing.

“For Brent, which is a broader indicator of the global crude market, it is a combination of supply and demand.”

The US and China have scheduled to negotiate an interim trade deal in Washington on Wednesday.

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