In the face of recent trade truce between US and China, the Crude oil jumped over four percent on Monday, after Chinese President Xi Jinping and US president Donald Trump had reached a 90-days trade truce. During this period, no parties would be able to enhance or impose more tariffs and there will be negotiations regarding the China proposed trade deal.
Followed by the trade truce, Canada’s Alberta province have ordered a production cut and the OPEC along with Russia are also seeking out the supply cut opportunity to support the global oil market, as crude oil bullish momentum became upbeat.
On Monday, the Brent Crude rose by 3.75% and settled at $61.59, while the US crude gained 3.97% and was settled at $52.95. In Tuesday’s Asia Pacific Session, both US crude and Brent crude have surged over 5%, as OPEC members are looking forward to cut production for supporting the oversupply.
Although, Russia did not agree on the production cut previously, however, they have also been following the OPEC-lead and have agreed to a production cut. Amidst global oil oversupply, the production cut will be a major issue to discuss in the upcoming OPEC summit, due at December 6th-7th and Russia has expressed their intention to join OPEC as well.
At this standpoint, the crude oil appears to be a safe heaven for the buyers, as an energy analyst of Interfax Energy in London stated, “Initial signs of the U.S.-China trade relation on the mend have provided a boost to oil prices in today’s trading session. Nevertheless, whether the momentum will sustain hinges on tangible outcomes from the negotiations. ”