Oil hits 3-month high on Opec cuts

Bloomberg

Oil traded near a three-month high in New York as Organisation of Petroleum Exporting Countries (Opec’s) output curbs tightened global supply while trade talks between the US and China lifted financial markets.
Futures rose as much as 1.3 percent to the highest since November 20, after advancing 5.4 percent last week. President Donald Trump said talks with China were “ very productive” as his team returned from Beijing and readied for another round of discussions in Washington this week, raising hopes that a trade war between the world’s largest economies
will ease.
Saudi Arabia and other members of the Opec have made a strong start to their production cuts while Russia is accelerating its curbs, pushing crude 24 percent higher this year. Supply is also being threatened because of American sanctions against Venezuela and Iran. Reports that the US and China had reached consensus in principle on the main topics in their trade negotiations helped boost investors’ risk appetite.
“Saudi Arabia seems willing to do whatever is necessary to reach levels of $80 a barrel, and judging by the price reaction, they’re on track,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Even rather bearish factors, like a stronger-than-expected rise in US oil production does not seem to derail the price recovery.”
Brent for April settlement was at $66.31 a barrel, up 6 cents, on the London-based ICE Futures Europe exchange, after gaining 6.7% last week. The global benchmark crude’s premium over WTI for same month narrowed to $9.87, after widening to biggest spread in more than three months on Friday.
Conciliatory signals from the world’s two biggest economies are calming fears Washington will ratchet up tariffs on Chinese goods before a March 1 deadline.

“Big progress being made on soooo many different fronts!,” Trump said on Twitter Sunday.
Worries about the trade war worsening a global slowdown are receding, giving investors confidence that oil demand won’t be affected. Saudi Arabia is also pledging to cut its crude output beyond the level agreed with OPEC+ as it aims to drain any oversupply from the market.