Seoul — Oil prices climbed early on Friday, building on gains in the previous session, after the Organization of the Petroleum Exporting Countries (Opec) hinted at making deeper cuts in supply while optimism was revived over talks between the US and China to end their trade war.
International benchmark Brent crude futures were at $59.26 a barrel by 2.51am GMT, up 16c, or 0.3%, from their previous settlement. Brent settled up 1.3% at $59.10 a barrel on Thursday.
US West Texas Intermediate (WTI) crude futures rose 16c, also up 0.3%, from their last close to $53.71 per barrel. In the previous session, WTI settled 1.8% higher at $53.55 a barrel.
On Thursday, Mohammad Barkindo, secretary-general of Opec said all options were on the table, including a deeper supply cut to balance oil markets. A decision would be taken at a December meeting between Opec and its partners, he said.
Opec lowered its 2019 global oil demand growth forecast to 0.98-million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08-million bpd, according to Opec’s monthly report.
Beyond Opec, trade talks between the US and China also remained on the market’s radar as the world’s top two economies seek to resolve a more-than-a-year-long trade row that has slowed global economic growth and curbed fuel consumption.
“Oil bought into the upbeat tone from the bilateral talks as well, for better or for worse, and was also boosted by fighting talk on prices by the Opec secretary-general,” said Jeffrey Halley, a senior market analyst at Oanda in Singapore.
Top US and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday, with business groups expressing optimism that the two sides might be able to ease tensions and delay a US tariff hike set for next week.
“The US is the largest global consumer of oil while China is the biggest driver of year-on-year oil demand growth,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
“The most significant sentiment driver hinges on the outcome of the trade talks which, if [they] end on a positive note, could go along way to begin to repair the economic damage done … these economic powerhouses would need more oil,” said Innes.
US President Donald Trump is set to meet Chinese vice-premier Liu He at 6.45pm GMT on Friday, the White House said.