Oil Prices Rise Amid Disruptions to Libyan Oil Exports-OPEC-led cuts

Asian equity markets are trading higher Wednesday, following the tone set by their U.S. counterparts on Tuesday. Additionally, investors are also reacting to news reports that China is planning to cut tariffs on cars made in the United States to 15 percent from the current 40 percent. This may represent a softening in its tone toward U.S.-China trade relations. There was another positive development over U.S.-China trade relations on Tuesday. According to a report, Chinese Vice Premier Liu reportedly said that he had been in discussion with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, with the aim of de-escalating a global trade war.

The dollar held near a one-month high against its peers on Wednesday, supported by a rebound in U.S. government bond yields and weakness of the pound as its battering from uncertainty about Brexit continued. The greenback was lifted as long-term U.S. Treasury yields bounced from three-month lows. Sterling took a big hit at the start of this week after British Prime Minister Theresa May delayed a parliamentary vote on her Brexit deal. The pound suffered further on Tuesday on media reports that May’s parliamentary colleagues believed they had enough numbers to mount a no-confidence vote in her leadership.

GBPUSD crawled up 0.15 percent to $1.2505 after dropping to $1.2480 overnight, its weakest since April 2017. The currency has lost 1.7 percent this week. USDJPY pair trades well above 113 level as the US Dollar sees steady lift against the Japanese Yen as a lack of high-impact data in the Pacific-Asia trading session, as well as a breather cycle in risk-off headlines is allowing investors the opportunity to step back out of the safe-haven Yen.

In commodity markets Oil prices rose in Asia following reports of a production loss of 315,000 barrels per day from the El Sharara oilfield, which was seized at the weekend by a local militia group. Libya’s National Oil Company (NOC) reported an additional loss of 73,000 bpd at another oilfield, El Feel. OPEC announced Friday that it would reduce overall production among its members by 1.2 million barrels per day (bpd) during the first six months of 2019 to stave off a global glut in supplies and prop up prices. Prices jumped on Friday following the news, but gave back some of their gains this week, as markets are not convinced the cuts would be enough to end oversupply.

U.S. crude futures were last up 60 cents at $52.30 per barrel. International Brent crude oil futures Were at 60.92 per barrel, up 72 cents, or 1.2 percent from their last close.