On Friday, oil prices declined a little bit. However, it is still on its way for a third consecutive weekly gain following the easing of U.S.-China trade tensions. As a result, this exalted business confidence and the outlook for global economic growth.
Then, Brent fell 7 cents at $66.47 per barrel. This is equal to a weekly increase of about 2%. U.S. West Texas Intermediate crude edged back 10 cents at $61.08 a barrel. It has a gain of about 1.5% during the week.
Aside from that, the development in a long-running trade war between the United States and China has fueled expectations for higher energy demand next year.
On Thursday’s oil news, China revealed a list of import tariff exemptions for six oil and chemical products from the United States. And this happened days after Washington and Beijing announced an interim trade deal they set to sign at the start of January.
Almost all major economies have probably averted recession for now. But the growth will stay subdued in the coming 2020. Analyst Barbara Lambrecht stated, “The energy sector as a whole looks set to end 2019 with a solid year-on-year gain.”
The analyst added that this was all because of the oil market.
In addition to that, Brent is 23% more pricey compared to it was at the beginning of the year. Then, oil prices went down by nearly 20% in 2018.
UBS pushed its oil price forecast for 2020. But it also anticipates the oil market to become oversupplied by 0.3 million barrels a day next year.
UBS analyst Giovanni Staunovo, “Our end-of-quarter Brent price forecasts are $60 per barrel for 1Q20 and $62 per barrel, $64 per barrel, and $64 per barrel for the following three quarters.”
In the previous forecast for the four quarters of 2020 of UBS, they were $58, $55, $60 a barrel, respectively.
Then, a U.S. weekly drilling report by energy service firm Baker Hughes gave another four oil rigs in the week to December 13. And this brings the total count to 667.
According to an analyst, an expected decline in U.S. drilling activity must support oil prices.
Moreover, Japanese Prime Minister Shinzo Abe had a meeting with Iranian President Hassan Rouhani on Friday. And they talked about sticking on commitments made by Tehran in a landmark 2015 nuclear deal. Now, Japan, a U.S. ally, would do everything to secure stability in the Middle East.
Meanwhile, almonds, cashews, and pecans maybe some of the most accessible nuts to crack. And this is for China to fulfill its promise to purchase more U.S. agricultural products.
China might buy around $2.5 billion worth of American nuts per year as part of its phase one trade deal with the U.S. And that is more than it’s expected to spend on key American produce like corn, wheat, and even pork, which China needs a lot.
Furthermore, Beijing and Washington agreed on the first place of a trade deal the previous week. And this might see China buy $40 billion to $50 billion in American farm products. As a result, it sent market watchers clambering to draw up lists of what the Asian nation might import. At the same time, skeptics debate over the feasibility of such large purchases.