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Oil prices rise amid U.S.-China trade accord optimism

By Renzo Pipoli
Crude oil future prices rose early Monday in part due to renewed expectations of a trade accord between the United States and China. File Photo by Brian Kersey/UPI
Crude oil future prices rose early Monday in part due to renewed expectations of a trade accord between the United States and China. File Photo by Brian Kersey/UPI | License Photo

March 4 (UPI) -- Crude oil prices rose early Monday due to a combination of factors including renewed expectations of a trade deal with China, analysts said.

As of 9:20 a.m. EST, West Texas Intermediate crude future prices rose 1.4 percent to $56.57 per barrel, while Brent crude oil futures rose 1.3 percent to $65.89 per barrel.

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West Texas Intermediate prices had declined Friday to $55.80 per barrel, down 2.5 percent from the closing of the previous day.

"On Friday, the latest Baker Hughes rig count showed oil rigs drop by 10, consequently easing concerns over rapidly increasing shale production. Elsewhere, the boost in risk sentiment has also provided an undertone of support for oil prices after a Wall Street Journal report highlighted that the U.S. and China are nearing a trade deal," Daily FX analyst Justin McQueen wrote in a report.

"Short-term oversold conditions as well as signs of tightening supply are helping to underpin the market. Optimism over increased future demand because of a potential deal between the United States and China is also providing support," FXEmpire analyst James Hyerczyk wrote in a separate report Monday.

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However, "gains are likely being capped because of worries over slower U.S. factory activity." he added.

"Given the nearly $50 drop in gold prices over the last few days, I think the 'fear trade' ... may all be on its way out the door. If correct, then we could be looking at strong move coming soon in equities and -- given the strong correlation with oil prices in recent months -- a big move higher in crude futures as well," Jeff Yastine, analyst at Banyan Hill Publishing, told UPI.

Charts show that gold prices per ounce as of the end of Friday were just over $1,290. This compares with over $1,340 per ounce on Feb 19.

WTI reached its highest level for the year of $57.22 per barrel on Feb. 22. During 2018 it reached a high of over $76 per barrel on Oct. 3.

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