On Friday, Washington and Beijing announced a “phase one” agreement. U.S. officials said some tariffs would be reduced in exchange for a big jump in Chinese purchases of American farm products and other goods. Progress on trade could boost oil demand, but the market is still weighing the merits of the deal, said Phil Flynn, an analyst at Price Futures Group in Chicago. “The market is pausing to digest the U.S.-China trade deal,” Flynn said. “We’re trying to consolidate to see if we can hold above $60 before we get higher.” The agreement averted $160 billion in additional U.S. tariffs on Chinese goods that were to kick in over the weekend. “What the market needs now… is clarity around exactly what the deal entails,” analysts from ING Economics said. “The longer we have to wait for this detail, the more likely market participants will start to question how good a deal it actually is.”

On Sunday, U.S. Trade Representative Robert Lighthizer said the deal would nearly double U.S. exports to China over two years and was “totally done” despite the need for translation and textual revisions. China’s State Council’s customs tariff commission said it had suspended additional tariffs on some U.S. goods. Oil prices drew some support on Monday from Chinese data showing industrial output and retail sales growth accelerating more than expected in November. But growth in China is expected to slow further next year, with a likely government growth target of about 6% in 2020, down from 6%-6.5% this year.

Brent has rallied this year, supported by output curbs by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, which this month agreed to lower supply by a further 500,000 barrels per day as of Jan. 1. The decision, according to Saxo Bank commodity strategist Ole Hansen, “helped trigger a 25% increase in the combined crude long to 602,000 lots, the highest since May and the biggest one-week accumulation since December 2016”.