Oil Prices Surge on Hopes of Trade Deal | Finance Brokerage

.Oil prices rose to hit their highest in three months on Monday. Investors expressed confidence over a phase one trade agreement. They also kept a close watch on the Middle East after reports of the US airstrikes.

West Texas Intermediate (WTI) crude futures slightly stumbled 0.02% to $61.70 per barrel, while it gained around 36% in 2019.

Global benchmark Brent crude oil futures climbed 0.06% to $66.89 per barrel and has advanced about 27% this year.

Market analyst Margaret Yang said trading has been relatively flat due to the lack of traders during the holiday season.

Oil prices have reached their highest level since the Saudi oil field attack in mid-September. And thus, traders are also cautious about profit-taking opportunities, Yang added.

The latest developments in the partial trade deal between the US and China have lifted the crude as well.

China’s Commerce Ministry stated on Sunday that it was in close touch with the US.

Part of the arrangement involves the US cutting some of its duties. This comes in exchange for increased Chinese purchases of American farm goods.

The energy commodities market has also strengthened after the Energy Information Administration (EIA) reported a drop of 5.5 million barrels of US crude supplies in the week to December 20.

Oil Prices Likely to Stay Firm amid Middle East Unrest 

News of airstrikes by the US forces in Iraq and Syria against the Kataib Hezbollah militia group made no significant impact on the energy commodities market. But US officials warned of possible additional actions.

Sunday’s airstrikes happened after a US defence contractor died in a rocket attack at an Iraqi military compound.

The US strikes will weaken the group’s ability to perform future attacks on Americans and their Iraqi government allies, according to Jonathan Hoffman, spokesperson for the Pentagon.

Oil prices may also remain strong amid threats to production sites in Iraq and Libya.

Production in Iraq’s southern Nassiriya oilfield was halted on Saturday. That’s because protestors forced the employees to cut off the electricity from the field’s control station.

The country’s oil ministry said the shutdown would not affect their exports as they will utilize additional output from southern oil fields in Basra.

Two oil sources stated that production has resumed on Monday, but it will take up to two days to fully restore output.

Meanwhile, Libya’s National Oil Corporation (NOC) has warned of suspending operations in its western Zawiya refinery amid plans to evacuate staff from the site due to clashes between armed groups nearby.

The complex had a near miss after a missile nearly struck the facility on Thursday.

Still, the holiday season signaled that the energy commodities market would continue to struggle for meaningful moves, according to analyst Edward Moya.

Elsewhere, the precious metals market traded in the red on Monday, with the safe-haven gold down 0.1% to $1,515.95 per ounce.

The yellow metal, however, remained bullish as it continued to hold above $1,500 after climbing to $1,503.05 on December 24.

Silver fell 0.03% to $17.938, while palladium slipped 0.3% to $1,874.50 and platinum added 0.4% to $961.30 per ounce.