Oil prices near three month highs on U.S.-China trade deal

• Brent crude oil futures rose 17 cents or 0.3pc to $65.39 a barrel by 0940 GMT.
• Amid rising U.S. oil output, energy firms added rigs for the first time in eight weeks.
• Investors remained cautious as growth in China was expected to slow further next year.

LONDON: Oil prices on Monday held near three-month highs, supported by last week's announcement that an initial trade deal had been reached between the United States and China.

Brent crude oil futures rose 17 cents or 0.3pc to $65.39 a barrel by 0940 GMT, while West Texas Intermediate crude  was up 10 cents or 0.2pc to $60.17 a barrel.

The United States and China announced on Friday a "phase one" agreement that will reduce some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of U.S. farm products and other goods.

"What the market needs now, though, is clarity around exactly what the deal entails," analysts from ING Economics said. "The longer we have to wait for this detail, the more likely market participants will start to question how good a deal it actually is."

The Friday agreement averted additional tariffs on Chinese goods totalling $160 billion that the United States was set to impose over the weekend.

U.S. Trade Representative Robert Lighthizer said on Sunday the deal would nearly double U.S. exports to China over the next two years and was "totally done" despite the need for translation and revisions to its text.

China's State Council's customs tariff commission said on Sunday it had suspended additional tariffs on some U.S. goods that were meant to be implemented on Dec. 15.

Data from China on Monday showeing industrial output and retail sales growth accelerating more than expected in November offered some support for oil prices.

Investors remained cautious as growth in China was expected to slow further next year, with the government likely to set its growth target at about 6pc in 2020 compared with 6pc-6.5pc this year.

"It seems the market has now fully priced (in) the phase one trade agreement, so we are going to need further news if we are going to push through the important (technical) resistance that is just ahead," said Michael McCarthy, chief market strategist at CMC Markets.

Amid rising U.S. oil output, energy firms added rigs for the first time in eight weeks, although total U.S. oil rig count remains on track to fall for the first year since 2016.