Oil surges 5 percent on trade truce, expected supply cuts

December 3, 2018

LONDON (Reuters) - Oil prices jumped by more than 5 percent on Monday after the United States and China agreed a 90-day truce in a trade dispute, Canada’s Alberta province ordered a production cut, and as exporter group OPEC looked set to reduce supply.

U.S. light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent, before easing to around $53.25 by 1420 GMT. Brent crude rose 5.3 percent or $3.14 to a high of $62.60 and was last trading around $62.00, up $2.54.

“From Argentina to Alberta, the oil market news is about supply curtailments,” said Norbert Rucker, head of commodity research at Swiss bank Julius Baer. “A brightening market mood will likely extend today’s price rally in the very near term.”

China and the United States agreed during a weekend meeting in Argentina of the Group of 20 leading economies not to impose additional trade tariffs for at least 90 days while they hold talks to resolve existing disputes.

The trade war between the world’s two biggest economies has weighed heavily on global trade, sparking concerns of an economic slowdown...

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