Oil settled above $61 a barrel amid light volume as US President Donald Trump said a preliminary trade deal with China is “done” and ahead of government data expected to show another crude stockpile decline.
Futures rose 1% in New York Tuesday to close at a three-day high. Trump suggested that the US and China will sign a trade agreement ahead of a meeting with him and President Xi Jinping. American crude inventories fell by 1.5 million barrels last week, according to a Bloomberg survey before Energy Information Administration data on Friday and industry figures due later Tuesday.
With prices on the rise since October, the market is heading into Christmas in a completely different state from a year ago. Implied volatility, a measure of how much traders are willing to pay for protection against price swings, is less than half of what it was a year ago.
