Oil prices started the week by trading at their highest prices since November 2018, boosted by supply concerns due to sanctions from the U.S. against Iran and Venezuela, as well as OPEC’s production cuts which began in January. Also boosting prices was renewed optimism about a trade deal between the United States and China, which, if created, could boost demand.
U.S. WTI futures broke through the $56 per barrel level on Monday to trade at a high of $56.12 per barrel, before retreating slightly to trade at $55.96 per barrel as of 2:15 p.m. HK/SIN. Brent crude futures were trading at $66.55 per barrel, down from session highs of $66.78 per barrel.
According to reports by CNBC, the oil rally is expected to extend into the second quarter of 2019. According to Tom Kloza from the Oil Price Information Service, oil prices will continue to see a gentle upswing, though he says that overall, 2019 will see cheaper prices than 2018. Kloza points to the fact that many refineries are down for maintenance, a time that normally sees higher prices, but that hasn’t swung the pendulum aggressively thus far, illustrating that the decreased supply is coming with a simultaneous decrease in demand.
Currency Movements
On the currency markets, the dollar was trading lower against most of its primary trading partners, and the dollar index was down 0.10 percent to 96.81 .DXY. The greenback was weakened by trader optimism about a U.S.-Sino trade deal which sent traders running towards riskier assets. After a week of intense discussions in Beijing last week, the talks will move to Washington in an effort to bring the unresolved issues to an end before the March 1st deadline.
The dollar gained modestly against the yen, up 0.05 percent to 110.54. It eased against most other currencies. The British pound was up 0.16 percent against the dollar in the mid-afternoon to $1.2907. The euro gained 0.11 percent against the dollar to $1.1305.