Oil futures rose Tuesday, getting a boost from positive expectations around U.S.-China trade talks, while a move further into record territory by U.S. stocks.
January Brent crude BRNF20, +1.45%, the global benchmark, gained 70 cents, or 1.1%, to trade at $62.83 a barrel on ICE Futures Europe, a day after posting its highest close since Sept. 26.
West Texas Intermediate crude for December delivery CLZ19, +1.36% rose 60 cents, or 1.1%, to $57.14 a barrel on the New York Mercantile Exchange.
The Nymex December WTI contract “is up strong and chopping around $57.00 on optimism over China/U.S. trade talks, and a certain degree of correlation to all-time highs in U.S. equities,” said Robert Yawger, director for energy at Mizuho Securities U.S.A., in a note.
U.S. benchmark stock indexes saw mixed trading Tuesday after all three major U.S. equity indexes — the Dow Jones Industrial Average DJIA, +0.09%, the S&P 500 SPX, -0.10% and the Nasdaq Composite COMP, -0.01% — rallied to record finishes on Monday.
Reports the U.S. might roll back tariffs on $112 billion worth of Chinese imports as a concession to seal a “phase one” trade deal was credited with buoying sentiment across markets.
“All-time highs in U.S. equities imply a certain degree of positive demand construction,” Yawger said.
The Organization of the Petroleum Exporting Countries on Tuesday said it expects oil supplies to fall continuously over the next five years, indicting the cartel might need to further cut output to stabilize prices on the back of a U.S. production boom and sluggish oil demand. OPEC and its allies are set to debate whether to continue current production cuts of 1.2 million barrels a day or deepen the reductions when they meet in early December.
December natural-gas futures NGZ19, +2.06% tacked on 1.9% to $2.874 per million British thermal units. Prices for the front-month contract were poised for a second straight settlement at their highest since March as forecasts for winter weather in the Eastern U.S. raised demand expectations for the fuel.