Background on Key Figures and Relevance
On Wednesday, oil prices increased by 2% due to anticipation of new trade agreements between Washington and its allies. These potential deals could boost global economic growth and restrict Russian crude exports.
Donald Trump, the President of the United States, expressed optimism about reaching a “good” trade agreement with China during the upcoming Asia-Pacific Economic Cooperation (APEC) summit. This optimism follows a recent period of tension between the world’s two largest economies.
Trump also met with Indian Prime Minister Narendra Modi, stating that they had a “great conversation” focusing on trade. Trump further claimed, for the second time in a week, that India intends to halt its imports of Russian oil. India, the second-largest importer of Russian oil after China, has neither confirmed nor denied this information.
Impact on Oil Prices
Should India decide to stop importing Russian oil, it would need to source from other exporters, effectively increasing global demand and supporting prices. This shift is limited by the number of countries willing to buy more oil from Russia, according to Arne Lohmann Rasmussen, an analyst at Global Risk Management.
Additional Factors Influencing Oil Prices
On Wednesday, traders learned about an unexpected drop in U.S. weekly inventory due to increased refinery activity, indicating sustained demand.
Oil Price Movements
- Brent crude: The price for Brent crude oil, for December delivery, rose by 2.07% to $62.59.
- West Texas Intermediate: The price for West Texas Intermediate crude oil, used as a benchmark for the first time, increased by 2.22% to $58.50.
Expert Opinions
Ole R. Hvalbye, an analyst at SEB, stated that any sign of easing tensions between the U.S. and China regarding trade disputes would improve global economic prospects and oil demand forecasts.
