Oil prices was stable yesterday on optimism that the United States and China trade tensions will ease, and hopes that major economies will take stimulus measures to ward off a possible economic slowdown, after falling earlier on concerns over future demand.
Brent crude rose 3 cents to $59.77 a barrel while U.S. crude was down 11 cents at $56.10 a barrel. Both contracts had traded lower earlier in the session.
The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, signalling a slight softening of the trade conflict between the world’s two largest economies.
“It’s the ebbing and flowing of the United States and China trade war and some hope of economic stimulus that’s coming at these markets, including potential fiscal stimulus by the Germans,” said John Kilduff, a partner at Again Capital in New York.
Concerns over the overall level of demand for oil continue to weigh on crude prices; the Organisation of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.
A rally in equity markets around the world on growing expectations that global economies will take action against slowing growth also gave oil prices a floor.
China’s new lending reference rate was set slightly lower on Tuesday after the central bank announced interest rate reforms designed to reduce corporate borrowing costs, while in Germany there were also positive moves.
Germany’s coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.
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Source: INDEPENDENT BUSINESS FEED