Oil prices hold above $63 on trade talk optimism, OPEC
- by Emilio Sims
- in Money
- — Nov 19, 2019
West Texas Intermediate (WTI) crude CLc1 were also unchanged at $57.72 a barrel, having gained 0.8% last week.
While U.S. supply rose by 145,000 bpd in October, the IEA said, a slowdown in activity that started earlier this year looks set to continue as companies prioritize capital discipline. Currently, rapidly increasing United States shale oil production, along with global slowdown worries and the negative effects of the ongoing trade war, is the factor behind the bearish oil market outlook.
Heightened hopes of the United States and China and signing the phase one of the trade deal to avoid the next tariff hike helped crude oil prices gained traction on Friday.
Later this week, investors will be paying close attention to the Energy Information Administration's (EIA) weekly oil market report, which last week revealed that crude oil production in the USA rose to a record high of 12.8 million bpd.
Oil futures climbed on Friday because of the optimism over a potential China trade deal even as traders weigh a conflicting outlook for crude supplies.
However, the gains on Wednesday and Friday outpaced the drops amid expectations of improved demand for the energy and concerns over downtrend of USA drilling rigs.
The 16-month trade war between the world's two biggest economies has slowed growth around the world and prompted analysts to lower forecasts for oil demand growth, raising concerns that a supply glut could develop in 2020.
Chinese state media Xinhua reported that Chinese Vice Premier Liu He discussed a partial deal with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer in a phone call on the weekend.
It was the IEA's last monthly report before the December 5 to 6 talks among OPEC states and partners led by Russian Federation on whether to maintain supply curbs aimed at buoying prices and balancing the market.
According to Baker Hughes data, the total oil and gas rig count dropped to 806.
Opec+, which includes most members of Opec along with 10 non-Opec producers led by Russian Federation, have cut 1.2 Mmbpd from production all of 2019, a deal which ended next March.
Money managers raised their net long U.S. crude futures and options positions by 39,995 contracts to 169,386 in the week to November 12, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
