On Wednesday, the 20th of February, 2019, both US and UK crude oil prices climbed more than 1 percent, posting their yearly highs on optimisms of oil market rebalance and trade talk. In fact, the crude oil price was also boosted by US sanction on OPEC members such as Venezuela and Iran, alongside an outage in an offshore oil field in Saudi Arabia’s Safaniya, slashing output further, which used to produce 1,00,000 barrels of crude per day.
As the risk appetite had been getting moderated over the hopes of a rational resolution of the trade deal, appeal for the riskier assets such as crude oil increased substantially, and today’s market had reflected an overhaul of risk-appetite.
Apart from the production cut, the crude oil price remains well-supported of an unexpected decline in US oil inventory. Besides, the US president Donald Trump had been in talks of a truce extension of 60 days with China, pushing the market confidence higher.
While this report was being prepared, the 20th of February, GMT. 22.00., the UK crude rose by 1 percent to $67.10 per barrel, while the US crude posted a gain of 1.48 percent to $56.92 a barrel ahead of a contract’s expiry, and the April contract US crudes were settled at $57.16, up by 1.38 percent.
Despite a cheerful market atmosphere and rekindled optimism, analysts are still cautioning the investors to remain watchful over the outcome of recent round of trade talk, as an analyst of Price Future Group in Chicago, Phil Flynn said, “We’re in a market waiting for the next headline to drive us higher or lower. ”