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Oil prices have stabilized high, fueled by trade optimism and Middle Eastern tensions

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ILLUSTRATION. Illustration of crude oil prices.

JAKARTA. Oil prices remained at their highest level for three months on Monday (30/12). At 09.25 WIB, the price of West Texas Intermediate (WTI) oil for February 2020 delivery on the New York Mercantile Exchange was at US $ 61.73 per barrel, tending to be flat compared to last weekend at US $ 61.73 per barrel.

The increase in gold prices was supported by optimism about a trade agreement between the United States and China and the withdrawal of crude oil supply that was higher than expected. Meanwhile, traders are still watching for unrest in the Middle East.

Also Read: World oil hits record highs

Quoting Reuters, the market reacted little to news of US air strikes in Iraq and Syria against militia groups backed by Iran.

“There are several catalysts driving crude oil prices recently: trade optimism, decline in US oil stockpiles, weakening US dollar and (US) air strikes on Iraq,” market analyst Margaret Yang at CMC Markets was quoted as saying on Monday (12/30) ).

China’s Ministry of Commerce on Sunday (29/12) said they were closely related to the US to realize the signing of the long awaited trade agreement.

The two countries on December 13 announced a phase one agreement that reduced some US tariffs in return for the purchase of US agricultural products by China.

Oil prices were also supported by a decline in US oil stockpiles forecasts. US oil stockpiles fell by 5.5 million barrels in the week to December 20, far more than expected by analysts surveyed by Reuters who had forecast a decline of 1.7 million barrels.

In the Middle East, protesters on Saturday forced the closure of Nassiriya oil fields south of Iraq, while the US carried out air strikes on Sunday in Iraq and Syria against militia group Kataib Hezbollah.

“Traders are watching developments in Iraq, OPEC’s second big producer,” Stephen Innes, head of Asia’s AxiTrader market strategy, was quoted as saying by Reuters.

The Iraqi Oil Ministry said the halt of production at the Nassiriya oil field would not affect Iraq’s exports and oil production operations, because it would use additional output from the southern oil fields in Basra

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