Crude oil prices rose slightly Tuesday after China signaled progress in trade talks with the U.S. and Opec+ mulled deeper production cuts, Kallanish Energy reports.
Gains were capped by forecasts of a continued buildup in U.S. crude stockpiles.
Brent crude oil settled up 74 cents, or 1.3%, at $59.70 a barrel, while U.S. West Texas Intermediate crude was 85 cents, or 1.6%, higher, at $54.16/Bbl.
Opec+, which includes most members of Opec plus 10 non-Opec producers led by Russia, plans to consider whether to deepen cuts to crude supply when they next meet in December due to worries about weak demand growth in 2020, sources from the oil-producing group told Reuters.
Traders said the possible supply cut pushed prices higher, but gains were muted as the market contended with concerns about demand.
Washington and Beijing have made progress in trade talks, China’s vice foreign minister, Le Yucheng, said, and problems can be resolved as long as both sides respect each other.
The International Monetary Fund last week forecast fallout from the U.S.-China trade war and trade disputes across the world would slow global growth in 2019 to 3.0% — weakest in a decade. Lower economic growth typically squeezes demand for commodities such as oil.
Prices were also pressured by forecasts of a buildup in U.S. crude stockpiles.
Opec+ members have pledged to cut production by 1.2 million barrels per day (Mmbpd) until March 2020. The producers meet again on Dec. 5-6.
Russian Energy Minister Alexander Novak said U.S. oil production is likely to peak in the next few years as current oil prices are capping the pace of expansion.
The brisk pace of U.S. production, now the world’s highest, in the past few years has been a key factor behind the relative weakness in oil prices. However, output has slowed recently.
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