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Crude Oil Prices Surge as U.S. Statements on China Meeting Renew Focus on Supply Issues

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Crude oil prices surged on Friday after U.S. President Donald Trump said he and Chinese President Xi Jinping agreed that Iran cannot have nuclear weapons, returning market focus to the ongoing closure of the Strait of Hormuz.

Brent crude at last look jumped 3.1% to US$109.02/barrel and West Texas Intermediate crude gained 3.5% to $104.72/barrel. Besides the U.S.-Iran deadlock and the blocked strait, the market is also concerned about renewed military escalation, Reuters said in a Friday report, citing analysts.

Though the strait is still effectively closed, Iran's Revolutionary Guard said 30 vessels had crossed it since Wednesday evening, down from the typical number of 140 vessels before the war but a substantial increase if confirmed, the report said.

"Oil prices swung several times yesterday but still closed near the day's high," Reuters quoted Yang An, analyst at Haitong Futures, as saying. "Ships passing through the strait eased some market concerns, but not enough to change the strong trend driven by tight supply."

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