Oil prices rise on optimism over Sino-US trade talks extension

Oil prices have increased 2% over increased expectations on positive output following the extension of trade talks between the US and China.

International Brent crude futures rose $1.09, or 1.86%, at $59.81 per barrel, while US West Texas Intermediate (WTI) crude oil futures stood at $50.82 per barrel, up $1.04, or 2.09%, Reuters reported.

Stephen Innes at Oanda told the news agency: “After a dreadful December for risk markets, crude oil continues to catch a positive vibe.”

The trade talks between the two countries in Beijing were carried over into an unscheduled third day, amid signs of progress on issues including the purchase of US farm and energy commodities and more access to China’s markets.

US President Donald Trump tweeted: “Talks with China are going very well!”

State newspaper China Daily said that if the agreement involves compromise on both sides, Beijing will put an end to its trade dispute with the US.

The World Bank expects global economic growth to drop to 2.9% this year from 3% last year.

In a semi-annual report, World Bank chief executive Kristalina Georgieva said: “At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead.”

Oil prices have been gaining support from supply cuts that started at the end of last year led by the Organization of the Petroleum Exporting Countries and allies such as Russia.