A more dovish tone from Beijing is bolstering oil stocks amid a broader market rally on Friday.
Shares of Real Money Stock of the Day Chevron (CVX) , BP plc (BP) , ExxonMobil (XOM) and Royal Dutch Shell (RDS.A) are all moving higher on Friday as a potential trade war resolution coincides with better production figures from OPEC and U.S. producers.
The surge in individual stocks comes as both the WTI and Brent Crude indices jumped after China indicated it would hold trade talks with its American counterpart. The meeting scheduled for next week brings the possibility of a trade truce between the world's largest oil exporter and its largest importer.
"The global market rout, caused by economic and political uncertainty as well as tightening liquidity, paused on Friday after Beijing confirmed that a US trade delegation would visit on January 7- 8," Ole Hansen, head of commodity strategy at Saxo Bank wrote on Friday. "The outlook for gold into 2019 looks promising at this stage."
He added that oil is working as the bellwether for the overall markets as they suggest normalizing price levels.
Tony Roth, chief investment officer at Wilmington Trust, told Real Money that the likelihood of a resolution to the trade dispute between China and the United States is increasingly likely to come to fruition within the first half of 2019 at this point.
"There is tremendous pressure on both sides to reach an agreement," he explained. "There will be a need this year to not only reach an agreement, but a substantive agreement."
President Trump added to the optimism in the afternoon hours as he told an audience at the White House that negotiations between his administration and the Chinese delegation are "going very well."
He added that negotiations are proceeding in a similar fashion to those between the U.S., Canada, and Mexico.
To be sure, his proclamations are not always reliable and are often obscured by larger discussions, which are at the moment related to the government shutdown and national security.
Still, the escalation of the trade war in 2018 certainly added to the anguish for oil industry stocks in 2018. Perhaps the removal of trade barriers could help these stocks recover in a similar fashion.