Oil tops $58 as traders bet on a trade deal and economic rebound

A general view of the Novokuibyshev Refinery owned by Rosneft oil company on March 15, 2012 in Novokuibyshevsk, Samara region, Russia.
Sasha Mordovets | Getty Images

Oil rose on Monday after posting three straight weeks of gains, pushed higher by positive comments from the United States and China that rekindled hopes in global markets that the world's two largest economies could soon sign an interim deal to end their trade war.

Brent crude futures gained 25 cents to settle at $63.64 a barrel. West Texas Intermediate (WTI) crude gained 24 cents to settle at $58.01 a barrel. 

"Oil prices are surprisingly steady on Monday, despite the normal sensitivity to trade headlines," Craig Erlam, senior market analyst at OANDA said.

"Momentum is clearly lacking in the more recent rallies in crude, although the strong bounce late last week may give bulls some cause for optimism."

A move by China to protect intellectual property was also providing a supportive atmosphere for the trade talks, McCarthy added.

Analysts at Barclays said they expect Brent to oscillate around $60 a barrel for the next two years.

U.S. national security adviser Robert O'Brien on Saturday said that an initial trade agreement with China was still possible by the end of the year.

Chinese daily Global Times on Monday cited experts close to the Chinese government as saying that China and the United States have reached a broad consensus on the first phase of the trade deal, though some differences remain over the removal of tariffs.

U.S. President Donald Trump and Chinese counterpart Xi Jinping on Friday expressed a desire to sign an initial trade deal and defuse a 16-month tariff war that has lowered global growth.

However, concern remains that events in Hong Kong, riven by months of anti-government unrest, could undermine progress in trade talk.

O'Brien warned on Saturday that Washington would not turn a blind eye to what happens in Hong Kong, where demonstrators were angry at what they see as an erosion of freedoms.

The Organization of the Petroleum Exporting Countries (OPEC) meets on Dec. 5 at its headquarters in Vienna, followed by talks with other oil producers in the OPEC+ group, led by Russia.

The group is widely expected to extend its supply cut to mid-2020.

A group of officials called the Joint Technical Committee will meet on Dec. 4, a day later than first scheduled, an OPEC source said on Monday.

Unrest in Iran and Iraq have also supported oil prices, dealers said. Security forces opened fire on protesters in Baghdad and several cities in southern Iraq on Sunday, killing at least nine people and wounding dozens of others.

Thousands of supporters of Iran's clerical establishment rallied in Tehran on Monday, accusing the United States and Israel of instigating the most violent anti-government protests for a over a decade in the Islamic Republic.