1 month ago
Commodities

Oil Prices Rise on Trade Optimism; Production Cuts, U.S. Sanctions Also Supportive

Investing.com - Oil prices gained on Tuesday in Asia following positive comments on trade by the administration of President Donald

Investing.com - Oil prices gained on Tuesday in Asia following positive comments on trade by the administration of President Donald Trump and the president himself.

The U.S. Crude Oil WTI Futures were trading at $51.66 per barrel at 1:19 AM EST (6:19 AM GMT), up 0.5%.

International Brent Oil Futures were also up 0.5%, at $61.84 per barrel.

On Monday, White House adviser Kellyanne Conway told Fox News that U.S. President Donald Trump wants to meet with his Chinese counterpart Xi Jinping “very soon.”

“This president wants a deal. He wants it to be fair to Americans and American workers and American interests,” Conway added.

“He has forged a mutually respectful relationship with President Xi. They will meet again soon.”

Her comments raised hopes that the two countries might still be able to reach a trade agreement before a March 1 deadline for higher tariffs. Trump has said earlier that if no deal is agreed by then, he might double the rates of tariffs on Chinese imports.

Investor sentiment was further lifted after Trump told his supporters in Texas on Monday that his administration is working on “great deals on trade” and that he does not want China to have a hard time.

Trade negotiations between high-level Chinese and U.S. officials are ongoing in Beijing this week. Chinese Vice-Premier Liu He will reportedly meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday and Friday.

At the same time, voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and U.S. sanctions on Venezuela and Iran were also supporting oil prices, some analysts said.

However, J.P. Morgan believes supply-side risks are largely overshadowed by trade-related news and are not receiving too much focus at the moment.

"We believe that oil is not pricing in supply-side risks lately as markets are currently focused on U.S.-China trade talks, ignoring the risks currently in place from the loss of Venezuelan barrels," the U.S. bank said in a weekly note that was cited by Reuters.