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Oil advances amid anticipation for Trump’s speech

Oil advances amid anticipation for Trump’s speech

Mubasher: Oil prices rose on Tuesday, wiping out early losses, as markets hoped that US President Donald Trump may point to progress on the trade negotiations with Beijing in a speech later in the day, according to Reuters.

By 7:37 am GMT, US Nymex crude futures climbed by 0.32% to $57.04 per barrel (pb), after hitting $56.55 pb, while international benchmark Brent futures rose by 0.31% to $62.37 pb, after reaching as low as $61.90 pb.

Oil markets were dragged down on Monday due to fears about the impact of a prolonged trade conflict between the world’s two biggest economies and fuel consumers.

In the weekend, President Trump said that negotiations with China went “very nicely,” but Washington would still only ink a deal if it was the proper one for the US.

The US president also said that the White House’s willingness to lift tariffs on China was incorrectly reported.

Trump will be speaking to the Economic Club of New York later on Tuesday.

“Positive commentary about a possible US and China interim trade deal certainly helps, but the fundamentals are supportive,” Singapore-based Energy Aspects oil analyst Virendra Chauhan was quoted by Reuters.

Demand growth is set to accelerate next year, following a year of dashed expectations amid the US-Sino trade war, according to a new Fitch Solutions Macro Research report.

“We forecast demand to [grow] by around 0.5% this year, rising to 0.8% in 2020,” the report said, even with “trade and political risks [remaining] extremely elevated.”

On the supply front, Goldman Sachs also slashed its 2020 outlook for the US crude output growth, which climbed in recent years.

Goldman expected US output growth to come in at 600,000 barrels per day (bpd) over next year, 100,000 bpd lower than this year, “as many companies look to balance growth with capex.”