Investing.com - Crude oil futures settled higher on Monday as OPEC and its allies reportedly agreed to extend production cuts, while a U.S-China trade truce also lifted sentiment.
On the New York Mercantile Exchange crude futures rose 1.1% to settle at $59.09 a barrel, while on London's Intercontinental Exchange, Brent settled up 0.49% at $65.06 a barrel.
Russia agreed with Saudi Arabia to extend the current output-cut agreement by six to nine months, Russian President Vladimir Putin said, according to published reports.
“The fact that President Putin of Russia said he had agreed to roll over output cuts with Saudi Arabia over the weekend is very significant,” said Michael Kelly, global head of multi-asset at PineBridge Investments.
A nine-month extension to output cuts by OPEC and its Russia-led partners could make a big difference to oil prices, said Carsten Fritsch of Commerzbank (DE:CBKG).
Positive news on the U.S.-China trade front eased the prospect of a further dent to global growth, underpinning oil prices.
In the run-up to the trade truce, some had predicted the world economy would take a further knock if U.S. President Donald Trump imposed tariffs on the $300 billion worth of Chinese goods that are currently not subject to levies.
Despite the trade truce, some have warned formidable obstacles lie on the road to a deal.
"We believe a partial trade deal in 2020 seems to be the most likely scenario, but investors should expect more periods like the past six weeks and the attendant market volatility," Wells Fargo (NYSE:WFC) said in a note.