Crude oil prices moved higher on Thursday as optimism about a trade deal between the U.S. and China increased after President Donald Trump commented the U.S. was very close to enter into a trade deal with China.
Oil was also supported by a recent report from OPEC that there could be a small oil market deficit next year.
Donald Trump expressed optimism about a potential U.S.-China trade deal Thursday morning, tweeting, “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”
Trump has repeatedly expressed optimism about a trade deal but has previously suggested China wants to reach an agreement more than the U.S.
Speculation is rife that the Trump administration may delay additional tariffs on about $160 billion worth of Chinese goods slated for Sunday.
However, the International Energy Agency’s forecast that global crude inventories may rise sharply next year despite the OPEC’s decision to deeper output cuts, limited oil’s upside.
Traders also weighed the decision of the Federal Reserve and the European Central Bank to hold rates unchanged.
West Texas Intermediate Crude oil futures for January ended up $0.42, or about 0.7%, at $59.18 a barrel.
Brent Crude oil futures were up by about 1%, or $0.67, at $64.39 a barrel.
On Wednesday, WTI crude oil futures for January ended down $0.48, or 0.8%, at $58.76 a barrel, after data showed a surprise increase in crude inventories in the U.S. in the week ended December 6th.
Data released by Energy Information Administration (EIA) on Wednesday showed that crude inventories in the U.S. rose by 822,000 barrels last week, compared with analysts’ expectations for a 2.8 million-barrel drop.
The EIA said that crude stockpiles, at 447.9 million barrels, were about 4% higher than the five-year average for this time of the year.
Inventories at Cushing, Oklahoma, fell by 3.4 million barrels last week, registering their biggest decline since February 2018, while inventories of gasoline jumped by 5.4 million barrels.