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WTI crude oil

WTI Crude Oil Lower But Trades Near Three-Month Highs, Trade Deal Optimism Supports

Posted Monday, December 16, 2019 by
Arslan Butt • 1 min read

WTI crude oil prices have slid slightly lower but continue to trade close to three-month highs at the start of a fresh week, buoyed by the US and China moving closer to signing the phase one trade deal. At the time of writing, WTI crude oil is trading at around $59.82 per barrel.

On Friday, significant tensions were relieved from global markets after the two world leaders finally confirmed their progress towards a phase one deal with the removal of some tariffs on Chinese goods in exchange for increased imports of farm goods from the US. This drove crude oil prices higher to three-month highs, but WTI oil has edged lower since then as markets appear to have priced in the impact of the trade deal sentiment.

The trade deal announcement came just in time, a couple of days before the next round of tariffs was set to be implemented on Chinese imports worth $156 billion. Markets were concerned that the roll-out of these tariffs could possibly have worsened US-China trade tensions and put off any possible resolution until after the 2020 presidential elections in the US.

However, crude oil remains under pressure over continued worries of a supply glut in 2020 despite the OPEC agreeing to deeper production curbs. As per forecasts, the global demand for oil is expected to remain weaker into next year despite trade tensions fading between the US and China as a result of this partial trade deal.

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