2019.12.1719:32:00UTC+00Oil Prices Extend Upward Trend Amid Optimism About Demand

After ending the previous session modestly higher, the price of crude oil saw some further upside during trading on Tuesday.

Crude for January delivery climbed $0.73 to a new three-month closing high of $60.94 a barrel, closing higher for the fourth consecutive session.

Oil prices continued to benefit from optimism that completion of a phase one U.S.-China trade deal will lead to an increase in energy demand.

Adding to the optimism about the outlook for demand, the Federal Reserve released a report showing a bigger than expected rebound in U.S. industrial production in the month of November.

The report said industrial production jumped by 1.1 percent in November after tumbling by a revised 0.9 percent in October.

Economists had expected industrial production to climb by 0.8 percent compared to the 0.8 percent slump originally reported for the previous month.

The rebound in industrial production came as motor vehicle and parts output bounced back following the end of the strike at General Motors (GM),

"Boeing's decision to halt production of the 737 Max aircraft in January will wreak havoc on the manufacturing figures, but there are signs emerging that activity in the factory sector is beginning to turn a corner," said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, "Output still looks set to fall in the fourth quarter overall, but with the global backdrop stabilizing, trade tensions easing and the dollar no longer appreciating, prospects for the industrial sector look set to brighten a touch in 2020."

Oil prices also moved higher ahead of the release of weekly reports on U.S. oil inventories, which are expected to show a drop in crude oil inventories.

The American Petroleum Institute is due to release its report on oil inventories in the week ended December 13th later today, while the Energy Information Administration is scheduled to release its report Wednesday morning.