Oil prices gain as US, China close on trade deal

ANKARA-Anadolu Agency

Oil prices gained more than 1 percent on Dec. 12 and Brent crude opened higher on Dec. 13 after the U.S. and China signed off on a phase-one trade deal.

"Getting VERY close to a BIG DEAL with China. They want it, and so do we!" U.S. President Donald Trump said on Twitter on Dec. 12.

Later, Trump congratulated Boris Johnson's win in the U.K. and wrote "Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT. This deal has the potential to be far bigger and more lucrative than any deal that could be made with the EU, Celebrate Boris!"

The positive sentiment sent major indexes in the U.S. stock market to new highs as the Dow Jones and Nasdaq ended on Dec. 12 with more than 0.7 percent gains, and S &P 500 soared 0.86 percent to close at a record high level of 3,168.57 points.

International benchmark Brent crude jumped 1.2 percent to finish Dec. 12 at $64.48 per barrel and increased by 0.28 percent on Friday to trade at $64.66 a barrel at 0650 GMT.

American benchmark West Texas Intermediate soared 1.4 percent to close Dec. 12 at $59.59 a barrel but on Dec. 13 at the same time it declined 0.12 percent to trade at $59.52 per barrel.

U.S. and China have been working on a phase-one trade agreement since October, but up until now failed to resolve some of the key issues such as technology transfer and intellectual property rights.

As details of the phase one deal are yet to be announced, it is still unclear whether the sides have worked out those differences or made progress on other issues such as agriculture.

The world's two largest economies' closure of a deal comes before Washington's additional 15 percent tariffs on $160 billion worth of Chinese imports, which were scheduled to kick in on Sunday.

Over the last 20 months, the U.S. has imposed tariffs on $550 billion worth of Chinese imports, while China has reciprocated by implementing tariffs on $185 billion worth of imports from the U.S.

Due to the trade war between the world's two largest oil consumers, global oil demand was forecast to be low in 2020, with weaker global economic growth next year.