Oil prices have steadied after recent declines, over expectations of a reduction in US inventories and the signing of a trade deal between the US and China.
However, the easing of tensions in the Middle East limited price gains. This comes as Iran and the US avoid escalating their conflict further.
Brent crude grew by $0.02 to $64.22 per barrel. US West Texas Intermediate crude futures declined $0.04 to $58.04 a barrel. The benchmarks of Brent crude and US WTI declined by around 5% and 6% respectively, last week.
OANDA analyst Edward Moya said: “Oil prices are tentatively rebounding after seller exhaustion kicked in as investors await the next developments on the trade front and as earnings season begins.”
The prices were supported ahead of the US-China trade to be signed today. This deal marks a significant step in ending the trade conflict that had impacted oil demand and global growth.
China has committed to purchase over $50bn worth of energy from the US over the next two years. This report came from Reuters, citing a source with knowledge on a trade deal.
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In another development, according to a preliminary Reuters poll, those polled expected US crude oil inventories to have dropped last week.
Reuters carried out the poll prior to the reports from the American Petroleum Institute (API) and the Energy Information Administration.
In 2019, China’s crude oil imports grew by 9.5% from the previous year. This was China’s 17th straight year of oil import growth. It attributes this to growing demand from refineries constructed in the last year.
Oil prices reached their peak in almost four months after a US drone strike killed an Iranian commander earlier this month. Iran retaliated with missiles against US bases in Iraq. However, the prices declined with the two countries choosing to avoid escalating the conflict further.