Oil prices reached their highest levels since mid-November on Friday, boosted by hopefulness that the United States and China would soon reach a trade deal, but new record U.S. oil supply limited gains.
Brent crude futures briefly reached $67.73 a barrel, their 2019 high. The global benchmark traded 7 cents higher at $67.14 a barrel by 1:51 p.m. EST (1851 GMT). Brent was on track for a weekly gain of about 1.3 percent.
U.S. West Texas Intermediate (WTI) crude futures were up 32 cents to $57.28 per barrel, after hitting $57.81 earlier on Friday, also their highest for the year. WTI was heading for a more than 3-percent weekly rise.
Top U.S. and Chinese trade negotiators met on Friday to wrap up a week of talks that have seen the two sides struggle to reach a deal by midnight on March 1, when their seven-month trade war could escalate as the U.S imposes higher tariffs on Chinese imports.
U.S. President Donald Trump will meet with Chinese Vice Premier Liu He at the Oval Office later on Friday.
"Oil prices, as well as the stock market have been rising on the anticipation that China and the U.S. would agree to a trade deal," said Andy Lipow, president of Lipow Oil Associates in Houston. "In addition, we`re seeing a tightening of oil supplies around the world resulting from OPEC and non-OPEC production cuts."
Both benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russia, began to cut output to prevent a supply glut from growing.
However, surging U.S. crude oil production, is partly offsetting OPEC`s cuts.
U.S. crude production last week climbed to a record 12 million barrels per day as stockpiles built for a fifth straight week to their highest since October 2017 and exports hit an all-time high, the Energy Information Administration said on Thursday.
"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 last week`s record of 3.6 million bpd.
However, U.S. energy firms cut the number of oil rigs operating this week after three weeks of adding rigs, General Electric Co`s Baker Hughes energy services firm said in its report on Friday. [RIG/U] The report indicates the direction of future crude oil production.
Drillers cut four oil rigs this week and nine this month, the first time they removed rigs for three months in a row since October 2017.
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 in 2019. Goldman said it expected an average Brent price of $60-$65 per barrel in 2019 and 2020.(For a graphic on U.S. oil production, click here https://tmsnrt.rs/2VecTrj)
(For a graphic on U.S. commercial crude oil inventories, clik here https://tmsnrt.rs/2TXJSjb)
(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.