Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Rebounds as China Says It's Rolling Back Tariffs With U.S.

Published 07/11/2019, 16:58
Updated 07/11/2019, 21:22
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com – The Chinese seem to have taken control of the narrative on the trade war, saying they are rolling back tariffs with the U.S., delighting bulls across markets, including oil.

Prices of West Texas Intermediate, the benchmark for New York-traded crude, jumped more than 2% at Thursday’s session highs, while London’s Brent, the global gauge for oil, rose more than 1%. On Wednesday, oil prices fell on suggestions that even the first phase of a trade deal might be delayed until December.

In Thursday’s session, WTI settled up 80 cents, or 1.4%, at $57.15 per barrel. The U.S. crude benchmark dropped 1.5% on Wednesday after gaining 5.6% over three previous sessions.

London’s Brent crude rose 55 cents, or 0.9%, to settle at $61.74. It fell 2% a day ago to cut short a previous three-day rally of 4.5%.

Chinese Commerce Minister Gao Feng said earlier on Thursday that Beijing and Washington have agreed to phase out their more than year long tit-for-tat tariffs. Canceling tariffs is vital to the first phase of their trade agreement, which both sides have agreed to do as negotiations progress, he said.

Gao’s comments came ahead of any tweet on the matter from Donald Trump, and he also did not respond to the remarks from Beijing, which was unusual for the U.S. president. Media reports on Wednesday said the Trump administration was having difficulty figuring out how to hold Beijing accountable for its commitments should the president and his Chinese counterpart Xi Jinping sign a deal in the coming weeks.

But markets rallied anyway on Gao’s remarks, with all the three major indexes on Wall Street hitting record highs.

“The better U.S.-China headlines are creating underlying support for crude oil,” Olivier Jakob of Zug, Switzerland-based oil risk consultancy PetroMatrix, said. “We have no doubt that the White House will pump the headlines for the end-week print on the stock market.”

“But WTI is still in the position of having to prove that it can break away to the upside of the 200-day moving average.”

Jakob said the U.S. crude futures benchmark had to clear resistance at $58, while Brent had to cross $63.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.