Oil prices rose by more than 1 percent on Monday, lifted by optimism that talks could soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market.
Brent Crude futures were at $57.75 per barrel, up 69 cents from their last close. WTI crude oil futures were at $48.67 per barrel, up 71 cents.
The United States and Beijing have been locked in an escalating trade spat since early 2018 raising import tariffs on each other's goods. The dispute has weighed on economic growth. Companies like Goldman Sachs and JP Morgan are being challenged with predicting futures in both crude prices, as well as economic growth due to “strongest macro headwinds since 2015.”
Last week a survey found OPEC oil supply fell in December by 460,000 barrels per day (bpd), to $32.68 million bpd, a Reuter’s survey found last week, led by cuts from top exporter Saudi Arabia.
U.S. crude oil production stayed at a record 11.7 million the last week of 2018, according to weekly data by the Energy Information Administration (EIA) released on Friday. That makes the United States the world's biggest oil producer ahead of Russia and Saudi Arabia.
It will be interesting to see how talks continue to unfold, and if the U.S. can keep up this frantic production of oil. Time will tell.