Oil prices rose on Monday, buoyed by hopes of progress in U.S.-China trade talks and supported by challenges to supply facing major exporters.
Brent crude LCOc1 rose 78 cents or 1.3% to $59.15 a barrel by 10:50 a.m. CDT (1550 GMT), while U.S. West Texas Intermediate (WTI) crude CLc1 was at $53.74, up 93 cents or 1.8%. Both futures contracts ended last week with a more than 5% decline after dismal manufacturing data from the United States and China, with the trade row between the world’s top economies undermining global economic prospects.
U.S. and Chinese officials meet in Washington on Oct. 10-11 in a fresh effort to work out a deal, which U.S. President Donald Trump said his administration had a “very good chance” of achieving.
“There’s some optimism and there’s some short-covering. It felt like we completed a cycle-down pattern last week, though demand still seems to be on the soft side,” said Phillip Streible, senior market strategist at RJO Futures.
On the supply side, deadly anti-government unrest has gripped Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries (OPEC).
Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note.—Reuters