Oil surges 4 percent after US, China agree trade war ceasefire
|- The oversold oil benchmarks picked up a strong bid in Asia on US-China trade truce.
- OPEC is expected to agree to supply cuts this week.
The oversold oil benchmarks and other risky assets are flying high at press time, possibly due to US-China trade truce.
The dinner-table diplomacy between the US President Trump and Chinese President Xi Jinping conducted over the weekend produced a highly anticipated trade ceasefire agreement, under which the US will hold off imposing further tariffs on China and in return China will purchase "a very substantial amount" of US goods.
While oil was never included in the list of hundreds of products each side has slapped with import tariffs, the positive sentiment generated by the trade truce seems to have put a bid under black gold.
Also adding the bid tone are expectations that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC member Russia would announce supply cuts this week to rein in supply overhang.
Analysts are expecting OPEC to announce a supply cut of 1-1.4 million barrels per day (bpd) on Dec. 6.
At press time, WTI oil is changing hands at $53.25 per barrel; up 4.5 percent on the day. Meanwhile, Brent is trading a $61.87 per barrel; up 4.4 percent on the day.
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