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Oil ticks upward ahead of G20 summit, but US supply rise curbs gains

Opec and non-Opec members will meet in Vienna, Austria on Dec. 6 to discuss a new round of production cuts of 1 million to 1.4 million barrels per day

Reuters  |  Seoul/ Singapore 

Representative Image
Representative Image

prices ticked higher on Thursday on optimism that trade talks at the meeting could aid the global economy and improve the demand outlook, while an increase in US crude inventories to their highest in a year curbed gains.

US crude futures rose 38 cents, or 0.8 per cent, to $50.67 per barrel by 0338 GMT. The market ended the previous session down 2.5 per cent at $50.29 a barrel, after hitting the lowest since early October last year.

benchmark Brent crude rose 27 cents, or 0.5 per cent, to $59.03 a barrel, having dropped 2.4 per cent on Wednesday to $58.76 a barrel.

Both rose more than 1 per cent in early Asian trade.

"We have seen huge increases in supply and the demand picture is in question. However, we might see some movement on global trade issues at the meeting which starts on Friday," said Michael McCarthy, at and Stockbroking.

"I think we are seeing some positioning ahead of those potential demand-positive events."

Investors in commodity are looking ahead to the meeting of leaders of the Group of 20 nations (G20), the world's biggest economies, on Nov. 30 and Dec. 1, with the US-trade war at the top of the agenda.

US is open to a trade deal with but is also prepared to hike tariffs on imports from the country if there is no breakthrough on longstanding trade issues during a dinner on Saturday with Chinese leader Xi Jinping, said on Tuesday.

Xi said will widen market access for foreign investors and step up protection of intellectual property rights.

Meanwhile, rising supplies are keeping a lid on prices.

US crude inventories for the week to Nov. 23 added 3.6 million barrels to the most in a year at 450 million barrels, exceeding expectations, the said on Wednesday.

"WTI is now trading right around the $50 per barrel level, a price last seen well over a year ago, as the current oversupply situation has now manifested itself in 10 consecutive weekly increases in US inventories," said William O'Loughlin, at Australia's

The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members will meet in Vienna, on Dec. 6 to discuss a new round of production cuts of 1 million to 1.4 million barrels per day (bpd) and possibly more, OPEC delegates told earlier this month.

First Published: Thu, November 29 2018. 09:14 IST