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Oil prices rise on trade talk optimism, OPEC cuts

Reuters  |  SINGAPORE 

By Henning Gloystein

SINGAPORE (Reuters) - rose on Tuesday on hopes that U.S.-Chinese talks in would bring a halt to trade disputes between the world's biggest economies, while OPEC-led supply cuts tightened markets.

International futures were at $57.77 per barrel at 0113 GMT, up 44 cents, or 0.8 percent from their last close.

U.S. Intermediate (WTI) were at $48.85 per barrel, up 33 cents, or 0.7 percent.

U.S. said late on Monday that and Washington could reach a trade deal that "we can live with" as dozens of officials from the world's two largest economies held talks in a bid to end their trade dispute that has roiled global markets since last year.

Asian stock markets rose as investors hope Washington and will reach some sort of agreement.

Despite optimism around the talks in Beijing, some analysts warned that the relationship between Washington and Beijing remained on shaky grounds, and that tensions could flare up again soon.

"We remain concerned about the world's most important bilateral relationship," political risk consultancy said in its 2019 outlook.

"The U.S. political establishment believes engagement with Beijing is no longer working, and it's embracing an openly confrontational approach ... (and) rising nationalist sentiment makes it unlikely that Beijing will ignore U.S. provocations," said.

Beyond politics, are being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Exporting Countries (OPEC) as well as non-member

"Crude have benefited from production cuts and steadying equities markets," said Mithun Fernando, at Australia's

Looming over the OPEC-led cuts, however, is a surge in U.S. oil supply, driven by a steep rise in and production.

As a result, U.S. rose by a whopping 2 million barrels per day (bpd) last year to a world record 11.7 million bpd.

With drilling activity still high, most analysts expect U.S. to rise further this year.

Consultancy JBC said it was likely that U.S. was already "significantly above 12 million bpd" by early January.

(Graphic: U.S. oil production & drilling levels - https://tmsnrt.rs/2GYfhAi)

(Reporting by Henning Gloystein; editing by Richard Pullin)

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

First Published: Tue, January 08 2019. 06:51 IST
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