Oil prices rose on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports. Brent crude LCOc1 was up 61 cents, or 1%, at $62.74 a barrel by 1136 GMT. U.S. crude CLc1 rose 42 cents, or 0.7%, to $56.96. China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would help to ease the broad economic damage inflicted by the trade dispute between the world’s two biggest oil consumers.
“If some of the existing tariffs were to be dismantled, that should restore some measure of global demand for oil as economic and trade conditions recover,” said Han Tan, market analyst at FXTM. OPEC Secretary-General Mohammad Barkindo said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts. “Based on the preliminary numbers, 2020 looks like it will have upside potential,” Barkindo told a briefing. The Organization of the Petroleum Exporting Countries (OPEC) also said it would supply a diminishing amount of oil in the next five years as output increases from U.S. shale deposits and elsewhere.
OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook. Investors are also awaiting U.S. inventory data due later on Tuesday. U.S. crude oil inventories were forecast to have risen last week, while refined products stocks are likely to have declined, a preliminary Reuters poll showed on Monday.