Oil prices on Monday looked to extend last week’s gains, buoyed by optimism tied to trade talks between the U.S. and China as well as output reductions by major oil producers, including Saudi Arabia.
Saudi Arabia plans to cut its oil exports by 800,000 barrels a day from November levels, Dow Jones reported, citing comments from officials at the Organization of the Petroleum Exporting Countries. That followed upbeat jobs numbers issued Friday that had calmed recession worries, helping to lift the outlook for energy demand.
WTI crude for February delivery CLG9, +2.69% added $1.69, or 3.5%, to $49.65 a barrel on the New York Mercantile Exchange. The front-month contract rose 5.8% for last week, according to Dow Jones Market Data.
Global benchmark March Brent crude UK:LCOG9 added $1.11, or 2%, to $58.17 a barrel on ICE Futures Europe. The contract settled up about 7.2% for last week.
Oil demand optimism was lifted as senior officials from China unexpectedly attended negotiations between Beijing and their counterparts in Washington, in an effort to resolve longstanding trade disagreements that have underpinned uncertainty in global markets. According to Bloomberg, Chinese Vice Premier Liu He, a top economic adviser to Chinese President Xi Jinping, was among attendees, and some optimism has been drawn from the a top level official attended rather than lower-ranking officials.
Crude prices had plummeted in the fourth quarter by roughly 40% from four-year highs reached at the start of October, weighed down by a supply glut and fears of slowing global demand.
More recently, price support has come as separate surveys showed that December crude output from major producers saw their biggest monthly declines since January 2017.
Production cuts from the Organization of the Petroleum Exporting Countries and its allies came into effect at the start of this month. OPEC and