U.S. Crude Oil Prices Top $50 As The ‘Bottom In Oil Looks Solid’
U.S. crude oil prices climbed above $ 50 per barrel Wednesday on hopes that an extension in trade talks between the U.S. and China will lead to a deal.
After plunging 40% from October highs, crude oil prices have gained for eight consecutive sessions. In addition to optimism that U.S.-China trade tensions will ease, production cuts agreed to by Russia and OPEC took effect Jan. 1, and Saudi Arabia revealed plans to further curtail its output and exports.
“U.S. shale operators are still in pullback mode and with the OPEC cuts about to drain our supplies, the bottom in oil looks solid,” Phil Flynn, senior market analyst at Price Futures Group, wrote in his daily Energy Report. “Of course, if we see a reversal or panic in stocks that could change, but for now the new oil uptrend will be your friend.”
U.S. crude oil prices jumped 1.5% to $ 51.24 per barrel. Brent crude oil prices were also up 1.5% to $ 60.22.
Exxon Mobil (XOM) shares rose 1% to 72.74 in pre-market trading on the stock market today. Chevron (CVX) was up 0.7% to 112.60. BP (BP) was also up 0.7% early. Royal Dutch Shell (RDSA) rose 0.6%.
Crude Oil Prices Rise As China-U.S. Talks Extended
The scheduled two-day talks entered a third-day Wednesday buoying hopes that a deal could be reached between the world’s largest economies.
Vice Premier Liu He, China’s most senior economic officer, attended the first day of face-to-face talks in Beijing with U.S. Deputy Trade Representative Jeffrey Gerrish, a sign that China is serious about ending the trade war with the U.S.
The U.S.-China trade war has dampened expectations for global economic growth and hit U.S. oil exports.
But despite the positive talks, economists are concerned about economic growth.
Late Tuesday, the World Bank lowered its global economic growth outlook to 2.9% from a prior outlook of 3%.
Weekly U.S. Oil Data Due
The Energy Information Administration will report weekly data at 10:30 a.m. ET.
A S&P Global Platts survey of analysts expect a 1.4 million barrel drop in crude stockpiles while gasoline, stockpiles are seen rising by 4.2 mil barrels.
Late Tuesday, the American Petroleum Institute reported a 6.1 million-barrel drop in crude supplies and a 5.5 million-barrel increase in gasoline stockpiles.
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