Oil prices have increased due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and expectations of a trade deal between the US and China.
Reuters reported that International Brent futures increased by 18 cents at $65.25 a barrel, while US West Texas Intermediate (WTI) crude futures edged up 14 cents at $55.94 per barrel.
This increase in oil prices comes following reports that the US and China are close to agreeing on a trade deal, which is expected to roll back US tariffs on at least $200bn worth of Chinese goods and would put an end to a long dispute that has weakened global economic growth.
Hopes of a trade deal between the two countries offered some support to the oil market, which has been rallying for the past two months on production cuts.
A survey by Reuters found that OPEC supply declined to a four-year low in February, as top exporter Saudi Arabia and its members over-delivered on the group’s supply pact.
Sanctions imposed by the US against OPEC-members Iran and Venezuela also led to an increase in oil prices, as the move resulted in a reduction of around two million barrels per day (bpd) in global crude supply, Barclays bank estimated.
Energy companies in the US cut the number of oil rigs to the lowest in almost nine months in February. These reductions come as producers follow through on plans to decrease investment, despite a more than 20% rise in crude futures so far in 2019.