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Crude Oil Prices Rise on Trade War Headlines

Crude oilCrude oil futures were higher this morning as Asia kicked off another trade week. Sentiment was boosted with headlines that the two largest economic superpowers, the United States and China, bad agreed to pause their looming trade war. As they said, it will be put “on hold.”

As of 12:45 am, the international benchmark, Brent crude futures were up 0.5 percent or 36 cents. They were last trading at $78.87 per barrel. Brent, last week, was above the key $80 mark for the first time since November 2014.

U.S. West Texas Intermediate (WTI) crude futures were also trading higher. They were up 60 cents this morning to fetch $71.68 a barrel from their last close on Friday.

Crude Oil Traders react to Trade War Headlines and China and the U.S. reach an Agreement

The trade war between the two largest economic superpowers, China and the United States, is “on hold.” The two nations have agreed to stop their tariff threats while they work towards a wider trade agreement. This news comes from U.S. Treasury Secretary Steven Mnuchin. This boosted Asian financial markets in early hours on Monday.

However, oil prices were off the November 2014 highs recorded last week. Traders are saying that there is enough supply in the global market to meet demand. This is despite ongoing cuts led by the Organization of the Petroleum Exporting Countries (OPEC), and non-members led by Russia. There is a loss of output in Venezuela. There are also looming U.S. sanctions against OPEC member nation Iran.

Looking at economic headlines, out of the United States, energy service firm, Baker Hughes, released data that showed that the number of active rigs in the United States was at 844. This is a forward looking indicator. This count was the same as the prior week which was also the highest level of active rigs since March 2015.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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