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 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.
