Oil prices rise more than 1 pct on trade talks, supply cuts

Published 2019-01-06, 07:41 p/m
© Reuters.  Oil prices rise more than 1 pct on trade talks, supply cuts
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* U.S.-China trade talks start on Monday

* OPEC-led supply cuts began in December

By Henning Gloystein

SINGAPORE, Jan 7 (Reuters) - Oil prices started the week strongly on Monday, lifted by optimism that talks would soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market.

International Brent crude futures LCOc1 were at $57.75 per barrel at 0040 GMT, up 69 cents, or 1.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $48.60 per barrel, up 64 cents, or 1.3 percent.

Financial markets were being lifted early on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, due to start on Monday, would lead to an easing in tensions between the two biggest economies in the world. fundamentally for oil markets, traders said crude future prices were being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC Russia. not all factors are pointing to higher prices.

In the United States, crude oil production C-OUT-T-EIA stayed at a record 11.7 million barrels per day (bpd) in the last week of 2018, according to weekly data by the Energy Information Administration (EIA) released on Friday. makes the United States the world's biggest oil producer ahead of Russia and Saudi Arabia.

Record output is also swelling U.S. fuel stockpiles.

Crude oil inventories C-STK-T-EIA rose by 7,000 barrels in the week ending Dec. 28, to 441.42 million barrels.

Distillate and gasoline stocks, however, rose by a whopping 9.5 million and 6.9 million barrels, to 119.9 million and 240 million barrels respectively, the EIA data showed.

"The U.S. supply glut remains a bearish concern," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

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