Oil prices rose on Wednesday, further extending gains from the previous session on hopes that Washington and Beijing can resolve a trade dispute that has triggered a global economic slowdown.
U.S. West Texas Intermediate (WTI) crude oil futures were at $50.29 per barrel up 51 cents, or 1 per cent from their last settlement. It was the first time this year that WTI has topped $50 a barrel.
Also, the International Brent crude futures were up 42 cents, or 0.7 per cent at $59.14 per barrel.
Both crude price benchmarks had already gained more than 2 per cent in the previous session.
“Crude continues to extend gains as early reports from Beijing regarding trade negotiations are fueling optimism around successful trade talks between the U.S. and China,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.
“After a dreadful December for risk markets, Crude oil continues to catch a positive vibe,” he added.
The world’s two biggest economies will continue trade talks in Beijing for an unscheduled third day on Wednesday, U.S. officials said, amid signs of progress on issues including purchases of U.S. farm and energy commodities and increased U.S. access to China’s markets.
State newspaper China Daily said on Wednesday that Beijing is keen to put an end to its trade dispute with the United States, but that it will not make any “unreasonable concessions” and that any agreement must involve compromise on both sides.
If no deal is reached by March 2, Trump has said he will proceed with raising tariffs to 25 per cent from 10 percent on $200 billion worth of Chinese imports at a time when China’s economy is slowing significantly.
Oil prices have also been receiving support from supply cuts started at the end of 2018 by a group of producers around the Organization of the Petroleum Exporting Countries, OPEC, as well as non-OPEC member Russia.
“Crude oil prices continued to march higher, with investors becoming increasingly confident that the OPEC cuts would tighten the market,” ANZ bank said.
Meanwhile, the Arab Petroleum Investments Corporation (APICORP), in a report on Tuesday said oil prices are likely to trade in the $60 to $70 per barrel range by mid-2019.
Saudi Arabia-based APICORP specialises in funding petroleum projects.
US Commerce Secretary Wilbur Ross said late on Monday that Beijing and Washington could reach a trade deal that “we can live with” as dozens of officials from China and the United States held talks in a bid to end a trade spat that has roiled global markets since last year.