Oil Prices Rise Ahead Of Trade Deal, Likely Stock Draw

Mnuchin: US Works With China To Cut Off All Iranian Oil Imports

Oil extends decline as supply disruption fears recede

Oil prices are now back where they were in mid-December, with the market seemingly shrugging off the chance of more disruptions in the Persian Gulf. The global crude benchmark traded at a $6.04 premium to West Texas Intermediate (WTI) for the same month.

Brent crude was down 11 cents, or 0.19%, at $64.08 per barrel by 0916 GMT.

Oil prices turned negative for the year after dropping on Monday as traders and investors focused on the possibility of oversupply in crude amid dissipating tensions that initially threatened tanker movements in the Middle East.

Mnuchin described the agreement as "very, very extensive", although the deal will not completely resolve the trade dispute between the US and China.

Meanwhile, expectations of thawing trade tensions between the United States and China, the world's two biggest oil consumers, have offered support for prices.

"There is a continuing sense that the geopolitical risk from Iran has come down dramatically", said Phil Flynn, a senior market analyst at Price Futures Group Inc.

On the demand side, the United States and China are set to sign their limited trade deal this week, which may improve sentiment.

"Regardless whether the deal is signed, we might have a buy the rumors, sell the fact scenario unfolding", he added.

Elsewhere, Saudi Arabia's energy minister Prince Abdulaziz bin Salman said his country will work for oil market stability at a time of heightened U.S.

The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration, an agency of the U.S. Department of Energy.

Separately, U.S. crude oil inventories were expected to have fallen last week, a preliminary Reuters poll showed on Monday.

Brent hit four-month highs of $71.75 last week, while WTI surged to an eight-month peak of $64.72, reacting to the Tehran action which was in retaliation to the U.S. killing of top Iranian general Qasem Soleimani on January 3.

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