Crude oil prices rose sharply on Monday amid easing trade tensions after the U.S. and China agreed to a 90-day truce on their escalating trade war during the meeting of the presidents of the two countries in Argentina over the weekend.
While the U.S. President promised to suspend new tariffs on Chinese products after January 1, China said it will by more of agricultural products, energy and industrial goods from the U.S., in order to reduce the trade gap between the two countries.
The temporary truce has eased worries about global economic growth and concerns about demand slowdown. Meanwhile, the traders are looking ahead to the OPEC meets this week. It is expected that the oil producers will agree on a reduction in output to prevent a supply glut in the market.
Meanwhile, Saudi Arabia and Russia said they have agreed to reduce oil production, although no final decision was taken on the volume of reduction.
The Canadian province of Albert has announced that there would be an industry-wide 8.7% cut in oil production to deal with the supply gut.
In a significant move today, Qatar, the tiny Persian Gulf state, announced that it would pull out of Saudi-dominated OPEC in January and focus on its gas industry.
Crude oil futures for January ended up $2.02, or about 4%, at $52.95 a barrel.
On Friday, crude oil futures ended down $0.52, or 1%, at $50.93 a barrel, after declining to a low of $49.65 intraday.
According to data released by the U.S. Energy Information Administration, U.S. crude stockpiles increased for a tenth straight week, rising much more than expected in the week ended November 24th. In eight out of 10 weeks, the increase was much more than the expected level.
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