Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. Picture: REUTERS/AHMED JADALLAH
Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. Picture: REUTERS/AHMED JADALLAH

Singapore — Oil prices rose more than 1% on Wednesday, extending gains from the previous session on signs that Washington and Beijing may soon resolve a trade dispute that has cast a pall over the global economy.

US West Texas Intermediate (WTI) crude oil futures were at $50.53 a barrel at 4.59am, up 75c, or 1.5%, from their last settlement. That marked the first time this year that WTI has topped $50 a barrel.

International Brent crude futures were up 79c, or 1.3%, at $59.47 a barrel.

Both crude price benchmarks had already gained more than 2% in the previous session.

“Crude continues to extend gains as early reports from Beijing regarding trade negotiations are fuelling optimism around successful trade talks between the US and China,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

“After a dreadful December for risk markets, crude oil continues to catch a positive vibe,” Innes said.

The oil price jumps were in line with Asian stock markets, which climbed to three-and-a-half-week highs on Wednesday.

Trade talks in Beijing between the world’s two biggest economies entered a third day on Wednesday, amid signs of progress on issues including purchases of US farm and energy commodities and increased US access to China’s markets.

State newspaper China Daily said on Wednesday that Beijing is keen to put an end to its trade dispute with the US, but that it will not make any “unreasonable concessions” and that any agreement must involve compromise on both sides.

If no deal is reached by March 2, Trump has said he will proceed with raising tariffs to 25% from 10% on $200bn worth of Chinese imports at a time when China’s economy is slowing significantly.

Citing the trade tension, the World Bank expects global economic growth to slow to 2.9% in 2019 from 3% in 2018.

“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,” World Bank CEO Kristalina Georgieva said in a semi-annual report released late on Tuesday.

More fundamentally, however, oil prices have been receiving support from supply cuts started at the end of 2018 by a group of producers around Opec as well as non-Opec member Russia.