Oil rises on hopes for deeper Opec cuts and US-China trade talks
Market saw upbeat mood after first day of US-China trade negotiations
Oil prices climbed early on Friday, building on gains in the previous session, after Opec hinted at making deeper cuts in supply while optimism was also revived over talks between the US and China to end their trade war.
International benchmark Brent crude futures were at $59.26 a barrel, up 0.3 per cent from their previous settlement. Whereas, US West Texas Intermediate (WTI) crude futures also rose 0.3 per cent, from their last close to $53.71 per barrel.
On Thursday Mohammad Barkindo, secretary general of Opec, said all options were on the table, including a deeper supply cut to balance oil markets. A decision would be taken at a December meeting between the Opec and its partners, he said.
Opec lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day, while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to its monthly report.
Beyond Opec, trade talks between the US and China also remained on the market's radar as the world's top two economies seek to resolve a long trade row that has slowed global economic growth and curbed fuel consumption.
"Oil bought into the upbeat tone from the bilateral talks as well, for better or for worse, and was also boosted by fighting talk on prices by the Opec secretary general," said Jeffrey Halley, a senior market analyst at New York-headquartered Oanda, which provides currency solutions to corporate clients.
Top US and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday, with business groups expressing optimism that the two sides might be able to ease tensions and delay a US tariff hike set for next week.
"The US is the largest global consumer of oil while China is the biggest driver of year-on-year oil demand growth," said Stephen Innes, Asia Pacific market strategist at AxiTrader.
"The most significant sentiment driver hinges on the outcome of the trade talks which, if [they] end on a positive note, could go a long way to begin to repair the economic damage done ... these economic powerhouses would need more oil," said Mr Innes.
Updated: October 11, 2019 03:12 PM