WTI Crude Oil Trades Above $60 as OPEC Supply Cuts, US-China Phase One Deal Boost Sentiment

WTI crude oil prices are trading close to three-month highs but have edged slightly lower into Tuesday, over continued optimism in markets over OPEC’s deeper supply cuts and the US-China phase one trade deal. At the time of writing, WTI crude oil is trading at around $60.15 per barrel.

At the end of last week, the US and China announced their decision to finalize and sign the phase one trade agreement which has been under negotiations since October. The first phase of the trade deal will see China increase imports of US agricultural products and other goods while the US is set to suspend some tariffs and halve others against Chinese imports.

Crude oil prices also remain supported after leading banks JP Morgan and Goldman Sachs improved their oil price forecasts for 2020 on the back of the recent crude production curbs announced by OPEC and allies, as well as the confirmation of the interim trade deal. Both these factors are expected to strengthen crude oil demand in the coming year, while controlling the possibility of a supply glut.

In addition, economists are expecting a drawdown in US crude inventories for the previous week, which points to signs of increasing demand for crude oil in the US.