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Oil prices rise as China agrees to more U.S. energy purchases

Published 01/16/2020, 09:42 AM
Updated 01/16/2020, 09:48 AM
© Reuters. Oil prices rise as China agrees to more U.S. energy purchases
LCO
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TOKYO, Jan 16 (Reuters) - Oil prices rose on Thursday,
propelled higher by the long-anticipated signing of an initial
trade deal between Washington and Beijing that sets the stage
for a potentially huge increase in energy supplies from the
United States to China.
Brent LCOc1 was 33 cents, or 0.5%, higher at $64.33 a
barrel by 0118 GMT, while U.S. crude was up by 28 cents, or
0.5%, at $58.09 a barrel.
Under the so-called Phase 1 deal to call a truce in a trade
war between the world's two biggest economies, China committed
to buying over $50 billion more of U.S. oil, liquefied natural
gas and other energy products over two years. However, trade sources and analysts said China would
struggle to meet the target and gains in oil are likely to be
limited ahead of more detail on how the commitments will be
achieved. "Since this deal is only a truce, without cutting import
tariff(s) materially, the impact is limited," ANZ said in a
note.
"As Phase Two negotiations will track the progress of Phase
One, uncertainty remains. We think the tension will re-escalate
later this year," the Australian bank said.

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