ANKARA: Oil prices gained more than 1% on Thursday and Brent crude opened higher on Friday after the US and China signed off on a phase-one trade deal. “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” US President Donald Trump said on Twitter on Thursday.
Later, Trump congratulated Boris Johnson’s win in the U.K. and wrote “Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT. This deal has the potential to be far bigger and more lucrative than any deal that could be made with the EU, Celebrate Boris!” The positive sentiment sent major indexes in the US stock market to new highs as the Dow Jones and Nasdaq ended Thursday with more than 0.7% gains, and S&P 500 soared 0.86% to close at a record high level of 3,168.57 points.
International benchmark Brent crude jumped 1.2% to finish Thursday at $64.48 per barrel and increased by 0.28% on Friday to trade at $64.66 a barrel at 0650 GMT. American benchmark West Texas Intermediate soared 1.4% to close Thursday at $59.59 a barrel but on Friday at the same time it declined 0.12% to trade at $59.52 per barrel.
US and China have been working on a phase-one trade agreement since October, but up until now failed to resolve some of the key issues such as technology transfer and intellectual property rights. As details of the phase one deal are yet to be announced, it is still unclear whether the sides have worked out those differences or made progress on other issues such as agriculture. The world’s two largest economies’ closure of a deal comes before Washington’s additional 15% tariffs on $160 billion worth of Chinese imports, which were scheduled to kick in on Sunday.
Over the last 20 months, the US has imposed tariffs on $550 billion worth of Chinese imports, while China has reciprocated by implementing tariffs on $185 billion worth of imports from the US Due to the trade war between the world’s two largest oil consumers, global oil demand was forecast to be low in 2020, with weaker global economic growth next year. (AA)