Oil prices continued to rise overnight — prices have risen more than 5% over the past two trading days.
Brent Crude has gained 5.45% since the beginning of the week, currently trading at US $71.05, up from $67.38 on Monday (US time).
West Texas Intermediate Crude has increased a total of 5.36%, currently sitting at $65.64 a barrel, up from $62.30 on Monday.
DME Owen has also seen a 5.9% increase, currently trading at $68.10, up from $ 64.30 on Monday.
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Why has the price of oil increased?
The increase in the price of oil followed after Chinese President Xi Jinping’s speech at the Boao Forum for Asia.
As reported by CNBC, Xi said that China intends to significantly lower tariffs on imports of automobiles and strengthen the protection of intellectual property.
‘China does not seek trade surplus. We have a genuine desire to increase imports and achieve greater balance of international payments under the current account.
‘We encourage normal technological exchanges and cooperation between Chinese and foreign enterprises, and protect the lawful IPR owned by foreign enterprises in China.’
US President Donald Trump tweeted in response to Xi’s speech that he was very thankful for his,
‘Kind words on tariffs and automobile barriers … also, his enlightenment on intellectual property and technology transfers.
‘We’ll make great progress together!’
What’s next for oil prices?
The global oil market is highly responsive to changing conditions. Most recently, concerns of a trade war between two of the largest economies and lack of certainty has led to fluctuating prices.
That being said, we can only assume that the soothing of trade war tensions will lead to more stability for the market.
It seems Saudi Arabia has their sights set high — aiming to get oil near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco, as reported by Bloomberg.
Bloomberg reported that Saudi Crown Prince, Mohammed bin Salmon, told Time Magazine in relation to the initial public offering:
‘We believe oil prices will get higher in this year and also get higher in 2019, so we are trying to pick the right time’.
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