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Oil prices rise as U.S. President Trump set to meet North Korea's Kim

Reuters  |  SINGAPORE 

By Henning Gloystein

SINGAPORE (Reuters) - rose on Friday as Asian stock markets gained on that North Korean leader Un will meet with U.S.

The two will likely meet by and Kim has pledged to refrain from further nuclear or missile tests, South Korea's said late on Thursday after briefing officials on talks between and

The said Trump would accept the invitation at a place and time to be determined.

The lifted Asian stocks markets, and pulled along with them, traders said.

Brent futures were at $63.95 per barrel at 0102 GMT, up 34 cents, or 0.5 percent, from their previous close.

U.S. Intermediate (WTI) futures were at $60.39 a barrel, up 27 cents, or 0.45 percent. WTI also fell by more than 2 percent the previous session.

Beyond geopolitics, were mainly concerned with soaring output from the , which has risen by 23 percent since mid-2016, to 10.37 million barrels per day (bpd).

That's more than top exporter produces. Only pumps more, at almost 11 million bpd.

"It seems only a matter of time before the U.S. becomes the biggest in the world. The main question which keeps investors busy is when exactly this will be reached," Hans van Cleef, economist at Dutch ABN Amro, said in a note to investors.

Unlike producers, where output is largely dictated by companies, U.S. producers drill and sell purely based on economics. If prices remain at current levels or rise further, U.S. drillers are profitable and will raise output; if prices stumble, U.S. production will fall.

"The correlation between the U.S. and the will remain considerable," van Cleef said.

As much as on production, will depend on demand.

"Global demand will continue to grow by 1.5 million barrels per day in both 2018 and 2019. This would offer enough room for U.S. to increase production and for OPEC and her allies to minimalise the production cuts towards the end of 2019," van Cleef said.

The Middle East-dominated Organization of the Exporting Countries (OPEC) and since 2017 have been leading an effort to withhold production to prop up prices.

(Reporting by Henning Gloystein; Editing by Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, March 09 2018. 06:57 IST