Oil closed at a one-week high as investors digested signals that a U.S.-China trade deal is imminent.
Futures advanced rose 0.6% in New York on Monday. Chinese government officials are considering locations in the U.S. where leader Xi Jinping would meet U.S. President Donald Trump to sign a trade accord, people familiar with the plans said. Prices erased some of the session’s gains as doubts crept in about the extent and duration of any truce that may emerge.
“As the day went on we are getting the same opaqueness about what’s actually occurring in the trade talks,” said Gene McGillian, senior analyst and broker at Tradition Energy Group in Stamford, Conn. “The market is hunting for a driver.”
Prices rose as much as 2.2% in earlier trading, spurred on by the trade talks, record stock gains, positive economic data and rising bullish sentiment among money managers.
Yet futures remain down about 15% from a late April peak as the trade conflict between the world’s largest economies undermines demand for fuel to run trucks, cars, planes and trains.
“We are revisiting optimism about a positive outcome for U.S.-China trade talks, amplified by speculative long positioning,” said Frances Hudson, global thematic strategist at Standard Life Investments in Edinburgh, Scotland. The more recent economic data suggests the threat of recession is receding, she said.
West Texas Intermediate for December delivery rose 34 cents to settle at $56.54 a barrel on the New York Mercantile Exchange.
Brent for January settlement added 44 cents to close at $62.13 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.53 premium to WTI for the same month.
Meanwhile, Saudi Arabia is taking measures to help ensure a successful public offering of shares in the kingdom’s oil company. Taxes on the company have been reduced, incentives have been unveiled to entice investors to hold onto their shares, and dividends may be increased.
--With assistance from Alex Longley.
To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Joe Carroll
©2019 Bloomberg L.P.
