Crude oil futures contracts rose during the Asian trade session on Thursday as 2020 kicked off. The commodity and financial markets were closed on Wednesday for the New Year’s Day holiday.
Oil traders are monitoring rising tensions in the Middle East between Iran and the United States. This could threaten global supply. Traders are also cheering better trade relations between China and the U.S. today.
As of 1:30 am GMT, the global international benchmark, the Brent crude oil futures contract, was trading up 21 cents or 0.3 percent to fetch $66.21 a barrel.
The U.S. West Texas Intermediate (WTI) crude oil futures contract, for front end delivery, was also trading higher. This contract added 21 cents to trade at $61.27 per barrel.
Both of the headline oil futures contracts finished 2019 with their largest annual gains since 2016. Oil was boosted by a thaw in trade relations between the world’s two largest economies.
A pledge to make deeper production cuts by the Organization of Petroleum Exporting Countries (OPEC) and non-member allies led by Russia (OPEC +), also helped support prices in to the end of the year.
Crude Oil Traders Monitor Rising Tensions between Iran and the United States
Oil traders are watching, closely, mounting tensions in the Middle East. These tensions come after U.S. airstrikes, over the weekend, in Iraq against the Iran-backed Katib Hezbollah militia group. Then, yesterday, the Katib Hezbollah militia group sacked the U.S. Embassy in Baghdad. The United States has deployed more troops to the region.
On Tuesday, turning to trade news, President Donald Trump said that the preliminary trade agreement with China will be signed at the White House on January 15.
OPEC +, is also cutting production by an extra 500,000 barrels per day, as of January 1. This is in addition to their 1.2 million barrels per day in place since January of last year.