Oil surges after dramatic weekend

Monday morning, the international oil market rallies and offers bullish support to most other markets as well.

An eventful weekend was anticipated on the fuel and finance markets. Two topics, who have dominated the markets recently, came closer to a clarification; the long-lasting trade war between the US and China and the possible reaction from OPEC and Russia to the massive losses on the oil market during November.

In Buenos Aires, the world’s most powerful national leaders gathered for the annual G20 summit, and one of the most anticipated events of the meeting was the negotiations between Chinese President Xi Jinping and American president Donald Trump regarding the two countries’ trade war. The tone between the two countries had sharpened ahead of the meeting, but we did see more friendly signals during the weekend. Although Trump and Xi did not manage to end the trade war completely, the countries Sunday announced, that they had agreed on a 90 day “truce”, hoping that this period could be used to reach a permanent agreement.

Russian President Putin and the Saudi Crown Prince Mohammed Bin Salman were also present at the G20 summit and could use the event to discuss oil prices ahead of the upcoming OPEC-Russia summit, which will take place on Thursday. During the summit, Putin made public that the Russians are ready to re-start the production deal with OPEC, after the original pact has faded out over the last couple of months.

The news is received positively on the markets, and the oil price is up more than 5 % Monday morning. A barrel of Brent oil is now traded at around 62 US dollars. The big increase also causes rising prices on the coal and gas markets, and both the German and the Nordic power markets are up as well. The stock markets are happy about the news. The Asian markets opened the day bullishly, and the development continues in Europe this morning.