Oil prices rise on supply risk and US China trade deal hopes

Oil prices have increased by over 1% for the second consecutive day, driven by concerns over supply risks and the potential for a US-China trade agreement. The rise in oil prices is attributed to a combination of factors, including sanctions-related supply risks and the possibility of a trade deal between the US and China.

According to recent reports, investors have been digesting news of the US seeking oil for delivery to its strategic reserves. This development has contributed to the upward trend in oil prices. Brent crude futures have risen by 94 cents, or 1.5%, to $62.26 a barrel, while US West Texas Intermediate crude futures have climbed 92 cents, or 1.6%, to $58.16.

The oil market had previously experienced a decline, with prices reaching a five-month low on Monday. However, the recent increase in prices has been driven by supply risks, including the potential disruption of Russian oil exports to Asian buyers. Additionally, tensions between the US and Venezuela, a key oil-producing country, have also contributed to the rise in oil prices.

The US and China are set to meet this week in Malaysia to discuss trade talks, and investors are closely monitoring the progress of these negotiations. US President Donald Trump has expressed his expectation of working out a fair trade deal with Chinese President Xi Jinping, whom he plans to meet with in South Korea next week.

In related news, the US Department of Energy has announced plans to buy 1 million barrels of crude oil for delivery to the Strategic Petroleum Reserve. This move is intended to take advantage of relatively low oil prices to help replenish the reserve’s stockpile. According to the American Petroleum Institute, US crude, gasoline, and distillate stocks fell last week, which has also contributed to the rise in oil prices.

The increase in oil prices is significant, as it reflects the ongoing concerns over supply risks and the potential impact of trade agreements on the global oil market. As the US and China continue to negotiate their trade deal, investors will be closely watching the developments and their potential effects on the oil market.

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