Oil prices were high on Monday in Asia, with a slight recovery from its last week performance. During the time, when the OPEC the manufacturer club, tightened its supply output, there were progressive ongoing trade talks between the US and China. The report suggests that both the countries were very close to reach out a deal which will eventually bring an end to the tariff issue which had led for the slowdown of the economic growth globally.
The International Brent futures at 0135 GMT were at 65.46 dollar, which was up by 39 percent from its previous close. At the same time, the US West Texas Intermediate (WTI) crude futures were high by 36 percent at 56.16 dollars.
The recovery in the oil prices was noticed when the reports mentioned that the United States and China were both were close to end their trade dispute which had impacted the global economic slowdown.
In the on-going negotiation between the US and China, President Trump and President Xi might reach out to a formal trade deal during the summit which is to take place on March 27, the report has mentioned that there were productive talks taking place between the two countries, the report was published by Wall Street Journal on Sunday.
This positive news gave the needed support to the market which had affected the production of oil cuts from the past two months.
The Reuters survey observed that oil supply from the Organization of the Petroleum Exporting Countries (OPEC) was down to almost 4 years low in February. The top oil exporters Saudi Arabia and its Gulf associates have out-performed on oil group supply. Meanwhile, Venezuela has registered a further decline in the output.
In the previous week, the oil prices were moving down due to a decline in the manufacturing index data which was noticed in both the countries and there was a rise in the crude oil output. On Friday, Brent crude oil fell down to 1.9 percent, as much as 3 percent for the whole week and WTI crude were down by 2.6 percent for the week.
The result of the on-going trade talks that were taking place from a very long time between the US and China will increase the oil prices, and the investors will also focus on the supply of crude oil. The progressive trade talk news has improved the market performance across Asia and has declined the gold and dollar rate.
Oil prices have been significantly driven by the US sanctions against OPEC members of Iran and Venezuela, which Barclays bank predicts to have further resulted in the reduction of 2 million BPD (barrels per day) in the global crude supply.
There are positive signs in the United States regarding oil production. They believe that crude oil production is growing high than of past years. While, the energy companies of US had reduced the number of oil rigs in the previous week so as to look for new reserves which was at the lowest as compared to 9 months because few oil manufacturers strictly follow on plans to cut the expenditure, even though there was a 20 percent increase in the crude oil futures in this year.
Barclays further say that the performance of crude oil might be repeated in the second half of 2019 and we truly hope for it especially for US oil output.
The US sanction against Venezuela and Iran, both the OPEC members have supported for raising the prices in 2019 starting from January 1, Brent crude oil has achieved around 17 percent, and WTI crude has nearly achieved 18 percent gain.
During this week, the American Petroleum Institute on supplies numbers will be noticed by the investors on Tuesday, and on Wednesday the report on stockpiles from the US Energy Information Administration. On Friday, Baker Hughes is intended to publish its weekly oil rings counts which are active in the US.
The production of US has been up from 2018 onwards to around 12.1 million BPD at the time when the OPEC members and few of its non-affiliated members like Russia had reduced its output by 1.2 million BPD so as to support oil prices. These OPEC cuts have supported for a decent fall in the oil prices at the end of last year.