Analysts predict this week could be a big week for oil markets with the Organization of the Petroleum Exporting Countries (OPEC) meeting scheduled in a few days.
It is expected the outcome of this week’s OPEC meeting will result in a supply cut, which would be aimed at reining in emergent oversupply.
While there have been no official announcements detailing a supply cut, most analysts expect a reduction of 1-1.4 million barrels per day (bpd).
US oil producers continue to produce record amounts of oil, with crude output at a record level of more than 11.5 million bpd.
IG Market Analyst, Kyle Rodday says the news post-OPEC meeting could be significant.
“If at this week’s OPEC meeting we receive confirmation that production cuts are coming the markets way, this may put some sort of a base under oil prices moving forward.” Mr Rodda said.
WTI futures were up more than 3% in response to the US-China trade truce. (WTI) crude futures were at $53 per barrel at time of writing, up $2.07 per barrel, and 4.1% from last close.
International Brent crude oil futures were up $2.18 per barrel, or 3.7%, at $61.64 a barrel.
The meeting between Trump and Xi has lifted sentiment according to Mr Rodda.
"This has flowed through to oil prices at this early stage of the week, primarily due to the pro-growth impacts of a de-escalation in the trade war." Mr Rodda said.
While crude oil has not been included in the US import tariffs, traders are taking advantage of the positive sentiment and driving crude markets.
Mr Rodda also says the G20 meeting proved Saudi and Russian relations were stronger than ever.
"There were subtle signals coming out of the G20 of greater co-operation between the Saudi’s and Russian’s regarding oil production cuts.
The key ingredient to curb global oil production is a consensus between Russia and the (effectively) Saudi led OPEC about where prices ought to roughly be." Mr Rodda said.