Oil hits new 2019 high on U.S.-China trade talk hopes
Oil prices rose on Friday, supported by OPEC`s ongoing supply cuts and hopes that Washington and Beijing may soon end their trade dispute.
International Brent crude futures scaled a new 2019 high of $67.73 a barrel, up 66 cents from Thursday`s close. They traded 33 cents higher at $67.40 a barrel by 1444 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 47 cents at $57.43 per barrel, after hitting a new 2019 high of $57.81 earlier on Friday.
Further gains were tempered by U.S. crude oil production hitting a record 12 million barrels per day (bpd) and a surge in exports from the country.
The broad outline of a possible U.S.-China trade deal was beginning to emerge from talks between the two countries, sources told Reuters on Thursday.
The two sides are pushing for an agreement by March 1, the end of a 90-day truce agreed by U.S. President Donald Trump and Chinese President Xi Jinping late last year.
"Yesterday ... volume was low and U.S. data on crude and products was mixed, so the market didn`t really react," Olivier Jakob of Petromatrix consultancy said.
"Anything positive today on trade talks will boost the oil price."
Prices are being supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC and other producers led by Russia agreed in December to cut output by 1.2 million bpd to prevent a large supply overhang from growing.
Surging U.S. crude oil production, which the Energy Information Administration (EIA) said reached 12 million bpd for the first time last week, is partly offsetting the OPEC cuts. The United States is the only country to ever reach that level of oil production.
"We see total U.S. crude production hitting 13 million bpd by year-end, with 2019 averaging 12.5 million bpd," U.S. bank Citi said following the release of the EIA report.
The bank said that some weeks could see 4.6 million bpd of gross crude exports by year-end, topping this week`s record of 3.6 million bpd.
With U.S. supply surging, Goldman Sachs said it expected non-OPEC supply to grow by 1.9 million bpd this year, more than offsetting the OPEC cuts.
That means much will depend on demand, which Goldman said it expected to grow by 1.4 million bpd this year.
Given the supply and demand picture, Goldman said it expected an average Brent price of $60-$65 per barrel in 2019 and 2020.
U.S. commercial crude oil inventories rose by 3.7 million barrels to 454.5 million barrels last week, the EIA said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.