Oil prices climb back up as US and China put trade war “on hold”

Oil prices rose on Monday after news that China and the US have put a trade war “on hold”.

Bent crude futures were $79.07 at 0636 GMT, up 56 cents, or 0.71%, from the last closing price. US West Texas Intermediate (WTI) crude futures rose to $71.78 a barrel, up 50 cents, or 0.7 percent, from the last close.

Global markets were lifted after U.S. Treasury Secretary Steven Mnuchin said on Sunday that the US and China have agreed to drop tariff threats as they work on reaching a wider trade agreement.

U.S. bank Morgan Stanley said that the “temporary trade dispute will de-escalate over time through negotiation.”

“Both sides plan to work on implementing agriculture and energy purchases and to continue to negotiate on manufacturing and service trade, bilateral investment and intellectual property protection in coming months,” the bank added.

Oil prices hit $80 a barrel last week for the first time in four years which was nearly three times higher than its price in early 2016 when it was $29 a barrel.

The price of oil has surged amid a strong global economy and efforts by Opec and Russia to keep supply in check by curbing production in 2017. US President Donald Trump’s decision to pull the country from the Iran nuclear deal also sent crude prices up and Venezuela’s economic crisis has severely affected oil output in the country.

BP boss expects oil prices expect to retreat back to $50 to $65 a barrel 

BP’s Chief Executive Bob Dudley told Reuters that he sees oil price falling to between $50 and $65 a barrel because of an expansion in US shale production and the potential for Opec producers to exceed their quotas to replace potential falls in Iranian supplies caused by sanctions.