- Crude Oil Rallies On Trade Talks
Global crude oil rebounded from an almost two-year low on Wednesday following a report that U.S delegates will be meeting with Chinese officials to discuss trade dispute that has crippled global economy in recent months.
The Brent Crude oil, Nigeria’s type of crude oil, rose 8.7 percent on Wednesday to $54.22 a barrel, while the U.S. West Texas Index surged to $46.96 a barrel.
The uncertainty surrounding the global economy amid the US government shutdown plunged oil prices to almost 2-year low on Monday. However, the news that U.S. delegates will be meeting with Chinese officials on January 7, 2019, to resolve the trade dispute between the two world’s largest economies bolstered global oil outlook.
“We saw the market got hit really hard and we’ve had a couple of these strong bounces and they seem to be pretty short-lived,” said Gene McGillian, manager of market research at Tradition Energy, an energy consultancy based in Stamford, Connecticut. There are still “concerns about slowing demand growth and excess supplies.”
The report came at a time when traders were unsure about the direction of global financial markets, especially after a report that President Trump made attempt at firing Jerome Powell, the Federal Reserve Chairman.
Analysts believe it may be a strategic move to ease uncertainty and boost falling stock prices that the president blamed on Federal Reserve’s policy of rising interest rates despite the strong US dollar that is already hurting exports.
The US dollar gained slightly across the board, surging to 1.2655 against the British Pound. While crude oil climbed to $54.22 a barrel.
