Oil prices soared by more than 4.5 percent on Monday after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $53.41 per barrel at 0739 GMT, up $2.48 per barrel, or 4.9 percent from their last close.
U.S. crude prices were further pushed up by an announcement from Canada that Alberta province will force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage. Most of Alberta’s oil is exported to the United States.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore said Alberta’s decision was “an unprecedented step to ease a crisis in the Canadian energy industry.”
International Brent crude oil futures were up $2.66 per barrel, or 4.5 percent, at $62.12 a barrel.
China and the United States agreed during a weekend meeting in Argentina of the Group of 20 (G20) leading economies not to impose additional trade tariffs for at least 90 days while the pair 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.
Qatar announced plans to pull out of OPEC on Monday, just days before a crucial meeting between the influential oil cartel and its allies.
Speaking at a news conference, Qatar's Energy Minister Saad al-Kaabi said the country would withdraw from OPEC on January 1, 2019, ending a membership which has stood for more than half-a-century.
The decision comes after Qatar reviewed ways in which it could improve its global standing and plan its long-term strategy.
While Qatar is one of OPEC's smallest oil producers, especially when compared to the likes of de facto leader Saudi Arabia, it is one of the world's largest producers of liquefied natural gas (LNG).
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