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Oil dips on swelling U.S. supply, but mood generally upbeat on trade hopes

Reuters  |  SINGAPORE 

By Henning Gloystein

SINGAPORE (Reuters) - Oil prices dipped on Thursday on swelling U.S. supply, although the mood in global markets was increasingly confident amid hopes the and China may soon end trade disputes that have undermined global economic growth.

U.S. Intermediate (WTI) were at $51.93 per barrel at 0033, down 43 cents, or 0.8 percent, from their last settlement.

International futures had yet to trade.

Both had jumped by around 5 percent the previous day as financial markets around the world surged on that hopes that and may be able to soon end their trade disputes, soothing fears of an all-out trade war between the two biggest economies and its possible impact on global growth.

"Amid easing trade tension and a weaker U.S. dollar <.DXY>, rallied after reassured the market that its production cuts would remain in place," said on Thursday.

Saudi Arabia's minister said on Wednesday he was confident that supply cuts started in late 2018 by the Organization of the Exporting Countries (OPEC) and some allies, including Russia, aimed at reining in oversupply would bring the into balance.

said he would not rule out calling for further action in future, if needed.

Despite this, U.S. cut its 2019 by more than 10 percent on Wednesday, pointing to "weakening economic growth expectations" and rising from outside as reasons for their lower price forecast.

now expects Brent to average $61 a barrel this year, down from a previous estimate of $69 a barrel, and U.S. crude to average $54 per barrel, against a prior forecast of $60.

"Balancing the market would require discipline to continue well into 2020," it said.

The main source of new supply is the United States, where remained at a record 11.7 million barrels per day (bpd) in the week ending Jan. 4, the Information Administration (EIA) said on Wednesday.

That has resulted in swelling fuel inventories.

Although crude stocks dipped by 1.7 million barrels, to 439.74 million barrels, they remained above their five-year seasonal average of 435 million barrels.

Gasoline stocks rose 8.1 million barrels, to 248.1 million barrels, marking the largest weekly rise since December, 2016. Distillate stocks swelled by 10.6 million barrels, to 140.04 million barrels.

(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: Thu, January 10 2019. 06:06 IST
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