West Texas Intermediate (WTI) US Oil extends its rally on Friday, with the US benchmark trading around $100.90 at the time of writing, up 3.13% on the day, and breaking above the $100 level to reach a fresh weekly high.
Markets are reacting to comments from US President Donald Trump, who said that China agreed to buy US Oil following his summit with Chinese President Xi Jinping
The two-day Trump-Xi meeting concluded on Friday without any major announcement regarding the reopening of the Strait of Hormuz, a strategic route for global Oil exports. Donald Trump nevertheless stated that Beijing had committed to participating in the reopening of the critical waterway, without providing further operational details. Trump’s comments regarding future Chinese purchases of US Oil were enough to trigger a fresh wave of buying in the Oil market.
Chinese authorities have not yet officially confirmed such an agreement, but investors are favoring a scenario of potentially stronger global demand. Tensions surrounding the Strait of Hormuz also continue to fuel concerns about global Oil supply. Rabobank analysts note that even a temporary closure of the strait would trigger a significant increase in energy prices, while a prolonged disruption could force demand reductions across several industrial sectors.