21.05.201801:57:00UTC+00Oil Prices Rally as Markets React to Latest U.S.-China Trade War Development

Oil prices edged up on Monday, as markets reacted to reports that China and the U.S. have put an impending trade war between the two countries “on hold.”

Brent crude futures stood at $79.13 per barrel, up 62 cents or 0.8 cents from their last settlement. The international benchmark broke through $80 per barrel for the first time since November 2014 in the previous week.

U.S. WTI crude futures stood at $71.83 per barrel, up 55 cents or 0.8 percent from their last close.

The U.S. trade war with China was put on hold after the world's two biggest economies reached an agreement to set aside their tariff threats while they work together on a broader trade agreement, according to U.S. Treasury Secretary Steven Mnuchin on Sunday, giving global markets a boost in early trading Monday.

U.S. bank Morgan Stanley said that the temporary trade dispute will be resolved over time via negotiation. It added that both parties plan to work on implementing agriculture and energy purchases and to continue to negotiate on manufacturing and service trade, bilateral investment, and intellectual property protection in the following months.

Still, crude prices were some way off the November 2014 highs hit in the prior week as many traders and analysts say there is sufficient to meet demand despite ongoing production curbs headed by OPEC, declining production in Venezuela and looming U.S. sanctions versus major oil producer Iran.

On the supply front, the U.S. oil rig count was at 844, according to energy service firm Baker Hughes. The figures were same as the week before, which recorded the highest level since March 2015.