LONDON: Oil prices rose about 2 per cent on the final day of the year on Monday, mirroring gains in stock markets, but were on track for the first annual decline in three years amid lingering concerns of a persistent supply glut.
Hints of progress on a possible US-China trade deal, with US President Donald Trump saying he had a “very good call” with Chinese President Xi Jinping, helped bolster sentiment for oil.
Brent crude futures was up 83 cents at $54.05 a barrel by 0932 GMT, after rising by over a $1 a barrel in early trade to a high of $54.55 a barrel.
US West Texas Intermediate (WTI) crude futures were at $45.99 a barrel, up 66 cents, or 1.4 per cent, from their last close. WTI also rose more than a $1 in early trade, reaching $46.38 a barrel.
Both contracts are down more than a third this quarter, the steepest decline since the fourth quarter of 2014.
For most of 2018, oil prices were on the rise, driven up by healthy demand and supply concerns, especially around the impact of renewed US sanctions against major producer Iran, which were introduced in early November.
Brent crude, seen as a global benchmark for oil prices, rose by almost a third between January and October, to a high of $86.74 per barrel.
That was the highest level since late 2014, the start of a deep market slump amid bulging global oversupply, and many leading analysts and traders at the time said they expected crude to hit $100 per barrel again by the end of 2018.
Instead, Brent prices have wiped out all of 2018’s gains, plunging by almost 40 per cent from the year’s high, in what has been one of the steepest oil market sell-offs of the past decades.
The slump in oil prices came after Washington gave unexpectedly generous sanction waivers to Iran’s biggest oil buyers and as concerns over a global economic slowdown amid the Sino-American trade dispute dented the outlook for oil demand. — Reuters
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