U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Friday, putting both markets in a position to close higher for the week. The markets are also in a position to change the trend to up on the daily chart after posting a nearly month-long countertrend rally.
Prices Rise on Trade Deal Hopes
The catalysts behind the rally are hope for a trade deal between the United States and China and adherence to the OPEC-led plan to cut production, trim the excess global supply and stabilize prices.
Perhaps keeping a lid on prices are concerns over rising U.S. production and lower global demand.
After a mostly sideways trade earlier in the week, crude oil prices are picking up a bid on Friday in reaction to a report in The Wall Street Journal that Treasury Secretary Steven Mnuchin had floated the idea of easing tariffs on Chinese goods. This comes on top of the successful mid-level talks earlier in the month and the highly anticipated higher-level negotiations tentatively scheduled for January 30 and January 31.
At this time, the reaction to the report in the WSJ is all speculation since Treasury officials told CNBC that there is “no discussion of lifting tariffs now.” Nonetheless, the story has been strong enough to drive some of the weaker shorts out of the crude oil market.
OPEC Report Provides Additional Support
The late-in-the-week rally in crude oil is also being supported by an…