By Sharon Cho and Grant Smith
Crude is poised for a modest gain this week due to the positive sentiment around the trade deal, having surged by more than 7% last week as OPEC and its allies announced a surprise production cut. Yet as the details of the U.S.-China agreement remain scarce, and concerns linger over whether OPEC will follow through on its agreement, the sources of support for prices appear fragile.
See also: Commodities Enjoy Best Week in 5 Months as Trade Deal Struck
“Risk appetite among financial investors is now likely to remain high thanks to the deal between the U.S. and China,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. Yet “the oil market risks facing a massive over supply and a pronounced inventory build, at least in the first half of the year.”
West Texas Intermediate for January delivery rose 82 cents to $60 a barrel on the New York Mercantile Exchange as of 6:48 a.m. local time. Brent for February settlement added 1.7% to $65.27 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark traded at a $5.38 premium to WTI for the same month.
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