Oil Prices Highest in 3 Months

Oil prices extended gains on Friday, scaling three-month highs as the United States and China moved closer to a resolution to the 18-month trade war between the world’s two biggest economies that has raised big questions about global demand for crude.

Brent futures climbed 43 cents, or 0.7%, to $64.63 a barrel, its highest since September 23. West Texas Intermediate crude was up 31 cents, or 0.5%, to $59.49 a barrel, the highest since Sept. 16, CNBC reported.

“Risk appetite ran wild after Trump signaled that he made a deal with China and that will only be positive for global demand forecasts for crude,” said Edward Moya, senior market analyst at OANDA.

A slump in the dollar against the backdrop of a strong pound also helped to boost commodity prices.

Mirroring investor optimism, Asian share markets jumped to multi-month highs on Friday after Wall Street surged to record highs on Thursday.

“If we see even further progress with the US-China trade war, we could see global GDP rise by half a percentage point in 2020 and that would do wonders for crude demand forecasts,” said Moya.

While a trade deal that would end uncertainty could provide a shot in the arm for oil demand in the near term, concerns continue to hover about the demand profile amid ample supplies going forward.

The White House has agreed to suspend some tariffs on Chinese goods and reduce others in return for Beijing’s pledge to hike purchases of US farm products in 2020, sources said on Thursday.

But the White House did not release any official statement, raising questions about whether the terms had been agreed by both sides.