The New Year started with a rise in oil prices as a result of the lowering of tensions in the US-China trade war.
US President Donald Trump announced on Tuesday that the much-touted Phase 1 trade deal with China is expected to be signed on January 15 at the White House.
Brent crude futures rose by 22 cents or 0.3 per cent - trading at $66.22 a barrel, while US West Texas Intermediate (WTI) crude climbed 18 cents or 0.3 per cent - trading at $61.24 per barrel.
Ending 2019 on a high, oil prices have been supported by positive developments in the trade negotiations between the US and China, as well as the pledge by the Organization of Petroleum Exporting Countries (OPEC) and their allies led by Russia to cut production.
This January OPEC and its allies will cut another 500,000 barrels per day from their output - this is in addition to the previous cut of 1.2 million barrels per day that is ongoing. Furthermore, the American Petroleum Institute (API) latest data shows that US crude inventories have also fallen - crude stocks fell 7.8 million barrels as the year came to an end. The drop exceeded analysts' expectations of a decrease of 3.2 million barrels. It is unlikely that the unexpected rise in oil prices is sustainable because the fundamental challenges faced by oil-producing countries remain unchanged such as the growing pressure on individuals, institutions and countries to move away from fossil fuels.