Oil prices retained its positive performance as it drew nearer to achieving its three-month peak on Friday with upbeat weekly rise. Such positive performance was mainly from cooling tensions between Washington and Beijing’s trade truce that previously impacted demand and dragged global economic growth.
Brent futures LCOc1 clocked in 5 cents, equivalent to 0.08% to 66.59 per barrel by 0242 GMT. In line, US West Texas Intermediate crude CLc1 shed 8 cents, or 0.013% at $61.10 per barrel.
Fresh developments and upbeat headlines about months-long trade war between US and China uplifted market expectations for an increased energy demand on 2020.
On Thursday, China disclosed a list of import tariff exemptions applicable for six oil and chemical goods from the United States. Such came after US and China settled and agreed an interim trade deal to get signed early January.
JP Morgan and Goldman Sachs decided to raise its 2020 oil price forecast despite OPEC’s recent scheme of reducing outputs and latest global trade forecast.
The Organization of Petroleum Exporting Countries and its other parties decided early December to further reduce oil outputs to 500,000 barrels a day from its past cut of 1.2 million barrel per day. Major decline in US crude inventories pushed oil prices to achieve its three-month highs.
“Crude prices continued their stellar performance into year-end, nudged along by the more benevolent inventory data published by the EIA,” said Stephen Innes, market strategist at AxiTrader.
“Product demand is up, and with a more constructive global growth outlook than at any time of this year, oil markets remain supported by the fundamental backdrop,” Innes added.
“A world with less uncertainty (following last week’s proposed U.S.-China trade agreement) was the real driver of the market optimism on the 2020 outlook,” ANZ Research disclosed.
US crude oil stockpiles sunk by 1.1 million barrels to 446.8 million barrels in the week to Dec. 13, according to statements released by Energy information Administration. In line, ANZ added that expected decline in US drilling company should enforce oil prices.