Ejiofor Alike with agency reports
Crude oil price on tuesday hit over $70 as the trade war between the United States and China appeared to ease.
The price had on January 25, 2018 hit $71, its highest since December 2014.
After dropping, crude oil prices are bounding higher, extending yesterdayâ€™s steep gains, as geopolitical tensions ease.
The prices last Friday suffered their worst weekly declines in two months after they had followed equity markets lower amid growing fears of a trade war between the US and China, the worldâ€™s two largest economies.
But on Monday, crude oil tracked global stock prices higher on signs over the weekend that President Donald Trumpâ€™s administration might be softening its stance in the trade spat with China.
However, remarks from Chinaâ€™s foreign ministry and a tweet from Trump have suggested that the dispute could easily heat up again.
Global markets were trading positive territory yesterday after Chinaâ€™s President Xi Jinping vowed to continue opening the Chinese economy in a speech, which bolstered oil prices.
Brent crude oil briefly rose above $70. 88 per barrel, while the US benchmark West Texas Intermediate (WTI) futures were up 1.62 per cent at $64.45 a barrel.
Investors are waiting to see how the conflict in Syria would unfold after Trump promised to make a decision on whether he will attack â€œvery quickly.â€
After falling from an all-time high of $147 per barrel in July 2008, Brent crude price had hit a peak of $115 per barrel in June 2014 before the excess inventory in the oil market forced the price down to $27 per barrel in February 2016.
WTI also reached a peak of $105 per barrel in June 2014 before the sharp drop in oil prices.
However, a production-cutting pact between the OPEC, Russia and other producers has given strong tailwind to oil prices.
OPECâ€™s main objective for the cuts is to eliminate a global surplus in oil stocks and rebalance the market.
OPEC, together with Russia and a group of other producers, last November extended an output-cutting deal to cover all of 2018.
The cartel had at their November 30, 2017 meeting agreed to extend oil output cuts until the end of 2018 as part of the global efforts to eliminate excess oil supply that had dogged oil markets since 2014.
The current deal, under which OPEC and non-OPEC producers are cutting supply by about 1.8 million barrels per day, expires in March 2018.
OPEC is cutting output by even more than it promised and the restraint is reducing oil stocks globally, a trend most visible in the United States, the worldâ€™s largest and most transparent oil market.