Oil starts new year higher on trade optimism, Middle East in 'supply' tensions
India's Oil Imports from Brazil
Oilprices kicked off thenewyearhigheron Thursday as warmingtraderelations between the United States and China eased demand concerns while risingtensionsin theMiddleEastfuelled worries about supply.
Global benchmark Brent crude futures, rose 35 cents, or 0.5 per cent, to 66.35 a barrel by 0738 GMT, while USWest Texas Intermediate (WTI) crude was up 25 cents, or 0.4 per cent, at $61.31 per barrel.
Oilmarkets were closed on Wednesday forNewYear's Day.
Both benchmarks endedhigherin 2019, posting their biggest annual gains since 2016, buoyed at the end of theyearby a thaw in the prolongedtradedispute between the United States and China, the world's two largest economies and a deeper output cut pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.
"Oilremains supported by the back-burnertradetruce and the uptick in political unrest in Iraq," said Stephen Innes, chief Asia market strategist at AxiTrader.
The USmilitary carried out airstrikes against Iran-backed Katib Hezbollah militia group over the weekend. Angry at the airstrikes, protesters stormed the USEmbassy in Baghdad on Wednesday, although they withdrew after the United States deployed extra troops.
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In 2020, Brent is forecast to average $63.07 a barrel, up from December's estimate of $62.50, while WTI is forecast to average $57.70 a barrel, up from December's estimate of $57.30, as the OPEC-led supply cuts and the expectations of a US-Chinatradedeal boosted analysts' views on the prospects for theyear, a Reuters poll showed.
USPresident Donald Trump said on Tuesday the US-China Phase Onetradedeal would be signed on January15 at the White House.
January also marks the start of the deeper output cuts by OPEC and its partners, including Russia. OPEC and its allies have agreed to cut a further of 500,000 barrels per day (BPD) from January1, on top of their previous cut of 1.2 million BPD that started on January1ayearago.
A fall in UScrude inventories last week also supported prices. UScrude stocks fell 7.8 million barrels in the week ended December27, compared with analysts' expectations for a decrease of 3.2 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday.
Official data from the Energy Information Administration (EIA) is due on Friday as the release has been delayed by two days by theNewYear's holiday.
"Traders will look towards Friday's EIA report for forwarding guidance onoilprices," said Benjamin Lu, an analyst at Singapore-based brokerage Phillip Futures.