Oil gains after signing of Sino-US trade deal

Oil gains after signing of Sino-US trade deal

Oil prices rose on Thursday after the signing of phase 1 of the Sino-U.S. trade deal which will result in a rise in Chinese purchases of US energy products. Further, US crude inventories fell more than expected, which also lent support to the prices.

Brent was trading 0.7% higher at $64.45/bbl, while US crude was up by 0.7% at $58/barrel.

The Phase 1 deal involves China committing to buy over $50bn more of US oil, liquefied natural gas and other energy products over the next two years. However, tariffs would stay and be discussed only in phase 2 talks, which are expected to begin soon.

Meanwhile, US data showed a greater than expected drop in crude oil inventories. According to EIA, oil inventories fell by 2.5mn barrels, compared with analyst expectations of a drop of 500,000 barrels, Reuters reported.

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