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Oil rises supported by U.S.-China trade optimism, Middle East tensions

Oil prices kicked off the new year higher on Thursday as warming trade relations between the United States and China eased demand concerns, while rising tensions in the Middle East fueled worries about supply.Global benchmark.

Brent crude futures, were up 22 cents, or 0.3%, to 66.22 a barrel by 0430 GMT.

U.S. West Texas Intermediate (WTI) crude was up 18 cents, or 0.3%, at $61.24 per barrel.

Oil markets were closed on Wednesday for New Year's Day.

Both benchmarks ended higher in 2019, posting their biggest annual gains since 2016, buoyed at the end of the year by a thaw in the prolonged trade dispute between the United States and China - the world's two largest economies - and a deeper output cut pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.

"Oil remains supported by the back-burner trade truce and the uptick in political unrest in Iraq," said Stephen Innes, chief Asia market strategist at AxiTrader.

The U.S. military carried out air strikes against Iran-backed Katib Hezbollah militia group over the weekend. Angry at the air strikes, protesters stormed the U.S.

Embassy in Baghdad on Wednesday, although they withdrew after the United States deployed extra troops.

In 2020 Brent is forecast to average $63.07 a barrel, up from December's estimate of $62.50, while WTI is forecast to average $57.70 a barrel, up from December's estimate of $57.30, as the OPEC-led supply cuts and the expectations of a U.S.-China trade deal boosted analysts' views on the prospects for the year, a Reuters poll showed.


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