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Oil prices rise almost 5% after US delays tariffs on Chinese goods

The rebound in oil prices are a response from markets with hopes of a trade deal breakthrough between the US and China.

Oil prices on Tuesday rose the most within this year after the United States (US) said that it would postpone imposing a 10% tariff on some Chinese goods including laptops and cell phones.

Brent crude oil futures rose 4.7% to US$61.30 a barrel, making it the largest daily percentage gain for Brent since December when it rose by 7.9%. US West Texas Intermediate (WTI) crude oil was up by 4.0% to US$57.10 a barrel.

The US said it would delay until mid-December a 10% tariff on some Chinese goods on Tuesday including laptops, cell phones, games and children's toys, an announcement which would provide relief for retailers and businesses in the US and China ahead of the year-end festive shopping. Meanwhile, other goods such as agricultural products, clothes, and footwear will be hit by tariffs on September 1 this year.

The Chinese Ministry of Commerce said in a statement that trade officials from the US and China had conversed in a phone call and have agreed to talk again in two weeks.

The rebound in oil prices are a response from markets with hopes of a trade deal breakthrough between the US and China.

Other elements that influenced the rise in oil prices were the fall in US crude inventories last week and the suggestion that Saudi Arabia would continue to stick with its production cuts.

Last week, Saudi Arabia, the leader of the Organization of the Petroleum Exporting Countries (OPEC) said it planned to keep its crude exports below 7 million barrels per day for this month and next month to help ease on global oil inventories.

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