Oil Prices Attain 3-Month High Level On The U.S.-China Trade Deal
Recently, oil prices attained 3 Month highs, supported by the past week’s declaration that an initial trade agreement had been reached amid the U.S. and China. Reportedly, the Brent crude oil futures LCOc1 surged by 17 Cents or 0.3% to close at $65.39 per barrel, while WTI (West Texas Intermediate) crude CLc1 advanced by 10 Cents or 0.2% to close at $60.17 per barrel. The U.S. and China declared a “phase one” deal that will decrease some of the U.S. tariffs in exchange for what U.S. executives stated will be a huge jump in Chinese procures of the American farm commodities and other goods. Analysts from ING Economics stated, “What the market requires now, although, is clarity around precisely what the deal demands. The longer we wait for this factor, the more likely market players will begin to question how good an accord it actually is.”
The latest deal avoided extra levies on Chinese products summing up to $160 Billion that the U.S. was set to slap over the weekend. Robert Lighthizer, U.S. Trade Representative, stated the deal will almost double the American exports to China in the coming 2 Years and was “totally done” in spite of the need for conversion and reconsiderations to its text. China’s State Council’s customs tariff commission stated that it had suspended extra tariffs on some of the U.S. products that were meant to be executed on December 15. Financiers remained cautious since growth in China was anticipated to slow down further 2020, with the administration likely to set its development target at around 6% in the next year compared with 6–6.5% in 2019.
On a related note, recently Asian markets were calm as financiers shrugged off the U.S.-China trade deal. Hang Seng index in Hong Kong recoiled 0.3%, whilst Japan’s Nikkei 225 index and South Korea’s Kospi index both moved slightly lower. China’s Shanghai Composite index dropped by 0.3%, but later recovered the losses and was trading in the positive territory. The decline came following all four indexes climbed on news that the U.S. and China had attained a “phase one” trade deal that reduced some tariffs and made Washington cancel another round of levies planned to take effect from the last week.