JUST IN: Oil prices hit highest in 3 months

Daniel Fowler
December 15, 2019

On Friday, the 13th of December 2019, both UK and USA crude oil futures' prices posted solid gains and spiked to their highest levels in almost three months as risk-appetite took a robust boost from a limited trade deal reached between trade-war-struck China and the United States, while a decisive triumph for the Tories in December 12th's UK General Election had added to further optimism.

Oil settled above US$60 a barrel for the first time since missile strikes on Saudi Arabia sparked a record price surge three months ago. Brent LCOc1 crude, the global benchmark, rose $1.02 to settle at $65.22 a barrel.

Oil retreated after rising above $60 a barrel for the first time in nearly three months as investors attempted to assess the partial trade deal reached between the USA and China.

MSCI's gauge of global equities .MIWD00000PUS rose 0.55%, while the pan-European STOXX 600 index .STOXX gained 1.25%, boosted by hopes of an orderly Brexit after a landslide victory for UK Prime Minister Boris Johnson in Thursday's elections.

Oil rises near three-month high on partial U.S.

The alliance, known as OPEC+, agreed last week to lower supply by a further 500,000 barrels per day as of January 1.

However, the trade optimism overshadowed the unexpected build in US crude inventories. "Supported by strong demand ... that level was reached on the second day of trading", he added, highlighting how the phase one trade deal was adding good news for oil markers following the decision for more production cuts by Opec+.

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A drop in the US dollar coupled with a strong pound also helped boost commodities.

The index managed to recover from multi-month lows on Friday.

For the coming week, the market will further digest information about the U.S.

"This should NOT be described as a trade agreement". -China trade deal is "completely wrong".

As the global economy faces downward pressure, the agreement will boost confidence of the global market, stabilize market expectations, and create favorable environment for normal economic, trade and investment activities.

The latest forecast was issued after OPE and its allies announced they were deepening production cuts originally announced in December 2018.

While a trade deal that would end uncertainty could provide a shot in the arm for oil demand in the near term, concerns continue to hover about the demand profile amid ample supplies going forward.

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