Oil rises on US-China trade talks, OPEC-led supply cuts
SINGAPORE (Reuters) - Oil prices jumped around 1.5 percent on Monday, pushed up by optimism that talks in Beijing can resolve a trade war between the United States and China, while supply cuts by major producers also supported crude.
Brent crude futures LCOc1 were at $57.93 per barrel at 0635 GMT, up 87 cents, or 1.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $48.76 per barrel, up 80 cents, or 1.7 percent.
Financial markets were riding a relief rally on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, starting on Monday, would lead to an easing in tensions between the two biggest economies in the world.
The United States and Beijing have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods. The dispute has weighed on economic growth.
In the latest sign of widespread economic slowdown that could also hit fuel demand, British new car sales in 2018 fell at their fastest rate since the global financial crisis a decade ago, preliminary data from the Society of Motor Manufacturers and Traders (SMMT) showed on Monday.
Goldman Sachs said in a note on Monday it had downgraded its average Brent crude oil forecast for 2019 from $70 per barrel to $62.50 a barrel because of “the strongest macro headwinds since 2015.”
J.P. Morgan said in a note late last week that “the 3 percent global growth pace we have been anticipating for the next two quarters looks increasingly challenging.”
The bank also said that “bond and commodity markets appear to be pricing in on average close to a 60 percent chance of a US recession over the coming year compared to a 40 percent chance by our economists and 27 percent chance by the consensus.”