Jan. 7 (UPI) -- Crude oil prices were up Monday alongside news of the restart of trade talks between the United States and China, and also after a report of fewer operating rigs after recent price drops.
West Texas Intermediate crude front-month future prices rose 2 percent to $48.92 per barrel as of 8:00 a.m. EST, while Brent crude futures rose 1.6 percent to $58.02 per barrel as of the same time.
"China will be a focus today, " Tariq Zahir, managing member of investment-advisory firm Tyche Capital Advisors, told UPI.
U.S. and Chinese mid-level negotiators have restarted talks in which Americans are seeking changes in Chinese business practices they consider unfair, and are using as leverage offers to eliminate tariffs imposed last year on Chinese goods, as well as to cancel new tariffs announced for later this year, according to an NPR report Monday.
In addition to speculation of advances in trade talks between the U.S. and China that "could ease tensions and soften the slowdown in the global economy," traders were also reacting to positive news on the U.S. domestic front Friday, said a report by Ashley Kelty and Jack Allardyce at Cantor Fitzgerald sent to UPI on Monday.
Positive news for the U.S. economy on Friday included comments by Federal Reserve Chairman Jerome Powell that low inflation would make it possible for the Federal Reserve to be patient in future decisions regarding interest rate increases.
Stock markets, as well as crude oil, have seen declines in recent weeks related to concern of the impact of rising interest rates, as well as about an economic slowdown in the world's biggest energy importer China.
On Friday, the Energy Information Administration issued a report saying that U.S. oil inventories were virtually unchanged from the previous week at 441.4 million barrels. There had been expectations of a draw.
Another factor that could be pushing prices higher is a report that there are fewer rigs in operation, an indication of potential production declines ahead.
"The U.S. Baker Hughes reported a drop in the number of active drilling rigs last week -- down eight in the U.S. and 26 internationally," the Cantor Fitzgerald report said.
Market participants are also said to be watching how OPEC is meeting the quotas intended to reduce output in December. OPEC, and non-OPEC participants, agreed on a 1.2 million barrel per day output reduction.
In other news, Libya, a member of OPEC exempted from the reduction quotas accord in December, during the weekend did contribute to uncertainty about potential added supplies to the market, Cantor Fitzgerald said.
Libya's state oil company may soon restart production of its El Sharara field, which was shut late last year after a militia attack, cutting over 300,000 barrels of daily output, Cantor Fitzgerald reported officials there as saying.