Oil strengthened above $65 a barrel yesterday, supported by hopes that the US-China trade deal will bolster oil demand in 2020 and the prospect of lower US crude supplies.

The ‘Phase One’ agreement between the world’s two largest economies has been “absolutely completed,” Larry Kudlow, a top White House adviser, said yesterday, adding that US exports to China will double under the deal.

Brent crude, the global benchmark, slipped 12 cents to $65.22 a barrel by 0945 GMT, while US West Texas Intermediate crude eased 14 cents to $60.07.

“Christmas has definitely arrived early for oil producers,” said Craig Erlam, analyst at brokerage OANDA. “Brent could get closer to $70 before the rally starts to run on fumes.”

The prolonged trade dispute has been a dampener for oil demand and weighed on prices. Banks including JP Morgan and Goldman Sachs have revised up their 2020 price forecasts in the wake of the improving trade outlook and a new OPEC-led agreement to curb output.

“The risk-on tone is still noticeable,” said Tamas Varga of oil broker PVM. “The next event to look out for is the weekly US oil inventory statistics.”

Supply reports from oil industry group the American Petroleum Institute and the government’s Energy Information Administration are expected to show US crude inventories probably fell last week.

The first of the two, from the API, is scheduled for release at 4:30 p.m. EST (2130 GMT) on Tuesday. The government report follows on Wednesday.