Oil rises as US, China near trade deal

Bloomberg

Oil climbed as the US and China were said to near a deal on trade that would underpin the outlook for crude demand, while supplies around the world showed signs of tightening.
Futures in New York rose as much as 1.1 percent after a drop of 2.6 percent last week. The world’s two biggest economies are approaching an accord that could lift most or all US tariffs, according to people familiar with the talks. Prices were also supported by Baker Hughes data that showed working oil rigs in America fell to the low-est level since May, while Opec output declined again.
Oil has rallied about 24 percent this year as the Organization of the Petroleum Exporting Countries and its allies — known as Opec+ — cut production while American sanctions on Venezuela and Iran restrict supplies further.
“Growing compliance with the Opec+ deal and slowing rig count in the US should remain fairly supportive for the oil market,” said Warren Patterson, senior commodities strategist at ING Bank NV.
West Texas Intermediate for April delivery rose as much as 62 cents to $56.42 a barrel on the New York Mercantile Exchange, and traded at $56.26 in London.
Prices fell last week following weaker-than-expected reports on US factory orders and consumer sentiment.
Brent for May settlement was at $65.84 a barrel, up 77 cents, on the London-based ICE Futures Europe exchange. The global benchmark crude’s premium over WTI for the same month widened to $8.94.
The drop in American oil rigs, by 10 to 843 last week, came as explorers were chastened by a near 40 percent collapse in prices late last year.
In the Permian, the nation’s largest shale play, rigs fell by seven to 466, also the lowest since May.