You are here: Home » Reuters » News
Business Standard

Oil stable on trade talk optimism and OPEC cuts, but slowdown looms

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - were stable on Tuesday, supported by hopes that talks under way in involving U.S. and Chinese officials could end trade disputes between the world's biggest economies, while OPEC-led supply cuts also tightened markets.

International Brent crude futures were at $57.43 per barrel at 0218 GMT, up 10 cents, or 0.1 percent from their last close.

U.S. Intermediate (WTI) were at $48.62 per barrel, up 10 cents, or 0.2 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 and the held talks in a bid to end a trade spat 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.

There is also concern that a worldwide economic slowdown will dent fuel consumption, resulting in a reduction of bullish positions the hedge fund industry holds in crude futures.

OPEC VS SHALE

Looking at oil supplies, 2019 crude prices have been supported by supply cuts from a group of producers around the Middle East-dominated (OPEC) as well as non-OPEC member

"Crude have benefited from OPEC 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.

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

(Reporting by Gloystein; editing by Richard Pullin)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, January 08 2019. 08:06 IST
RECOMMENDED FOR YOU