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Oil rises 3 percent on U.S.-China trade talk optimism

Reuters  |  LONDON 

By Browning

(Reuters) - climbed around 3 percent on Wednesday as the extension of U.S.-talks in raised hopes that the world's two largest economies would resolve their trade standoff.

U.S. Intermediate (WTI) futures were at $51.36 per barrel at 1500 GMT, up $1.58, or 3.17 percent, the first time this year that WTI has topped $50.

International Brent crude futures were up $1.63, or 2.78 percent, at $60.35 per barrel.

Both crude price benchmarks added to Tuesday's 2 percent gains and have now been on the rise for eight straight days - their longest rally since June 2017.

"After a dreadful December for risk markets, continues to catch a positive vibe," said at in Singapore, citing tensions between the superpowers which have cast a pall over the world economy.

The trade talks in were carried over into an unscheduled third day on Wednesday, amid signs of progress on issues including purchases of U.S. farm and and increased U.S. access to China's markets.

"Talks with are going very well!" U.S. tweeted, without elaborating. Daily said on Wednesday that was keen to put an end to its trade dispute with the United States, but that any agreement must involve compromise on both sides.

Stephen Brennock, at brokerage PVM Oil, warned against excessive optimism.

"Buyers have placed all their betting chips on the US and China resolving their trade spat," he said.

"A failure to secure a meaningful breakthrough in the coming days will therefore spark a turnaround in sentiment. It is also worth noting that the global economic outlook continues to darken," he added.

The expects global economic growth to slow to 2.9 percent in 2019 from 3 percent in 2018, it said in a semi-annual report released late on Tuesday.

More fundamentally, have been receiving support from supply cuts started at the end of 2018 by the Organization of the Petroleum Exporting Countries and allies including

The OPEC-led cuts are aimed at reining in an emerging supply overhang, in part because U.S. crude output surged by around 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd.

from the is due at 1800 GMT on Wednesday.

(Reporting by Browning and Henning Gloystein; Editing by and Alexandra Hudson)

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

First Published: Wed, January 09 2019. 20:44 IST
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