Oil futures bounced higher Tuesday in an effort to snap a five-day losing streak that dragged the U.S. benchmark to its lowest level since early December.
West Texas Intermediate crude for February delivery CLG20, +0.69% rose 38 cents, or 0.7%, to $58.46 a barrel, while March Brent BRNH20, +0.79% was up 45 cents, or 0.7%, to $64.65 a barrel.
WTI, the U.S. benchmark, closed Monday at its lowest level since Dec. 3, while Brent, the global benchmark, saw its lowest close since Dec. 12.
Analysts said oil was buoyed in part by upbeat expectations around the expected signing Wednesday of a so-called phase one U.S.-China trade deal. The terms include a call for China to buy more than $50 billion in energy supplies, Reuters reported, citing a source familiar with the details.
Oil jumped earlier this month as tensions between Iran and the U.S. flared following a U.S. military strike that killed a top Iranian military commander in Iraq. But crude prices gave back gains last week as tensions appeared to ebb following a retaliatory strike by Iran aimed at bases housing U.S. troops in Iraq that produced no U.S. casualties.
Analysts said the focus returned to market fundamentals as geopolitical worries faded.
“Unfortunately for the bulls, the fundamental outlook over the first half of this year is not overly constructive. The market is set to see a sizable surplus, which should mean weakness for both the flat price and time spreads,” said Warren Patterson, head of commodities strategy at ING, in a note.
In other energy trade, February gasoline RBG20, +0.93% rose 0.9% to $1.6728 a gallon, while February heating oil HOG20, +0.31% was up 0.2% at $1.9027 a gallon.
February natural-gas futures NGG20, +1.60% gained 1.5% to $2.214 per million British thermal units.