Hands pass beneath pipes leading to oil storage tanks in Russia on February 4, 2014.
Andrey Rudakov | Bloomberg | Getty Representatives
Oil prices posted early gains as OPEC’s outlook for oil demand next year fueled hopes that the grower group and its associates will keep a lid on supply when they meet to discuss policy on output next month.
Optimism that the Common States and China could soon sign an agreement to end their trade war also seeped into the market after Drained House economic adviser Larry Kudlow said a deal was “getting close,” citing what he called exact constructive discussions with Beijing.
Brent crude futures were up 30 cents, or 0.5%, at $62.58 a barrel by 0147 GMT, demand dropped 9 cents on Thursday.
West Texas Intermediate crude was up 29 cents, or 0.5%, at $57.06 a barrel, after capture 0.6% in the previous session.
The rosy mood came after the Organization of the Petroleum Exporting Countries (OPEC) estimated on Thursday it expected demand for its oil to fall in 2020. That supports the view among markets that there’s a definite case for the group and other producers like Russia — collectively known as ‘OPEC+’ — to maintain limits on oeuvre that were introduced to cope with a supply glut.
OPEC+ on Jan. 1 cut output by 1.2 million barrels per day (bpd), and in July, the affinity renewed the pact until March 2020.
“Energy markets will remain fixated on rhetoric from OPEC+, (U.S.-China) barter updates and whether Beijing can somehow de-escalate the situation in Hong Kong without sending more troops,” said Edward Moya, superior market analyst at OANDA.
Jitters over geopolitical fallout from the Hong Kong situation linger after trenchant clashes between protesters and police this week, with Chinese President Xi Jinping saying on Thursday that closing up violence was the most urgent task.
Still, investors shrugged off a bigger-than-expected increase in U.S. stockpiles and rising production.
U.S. rough inventories grew last week by 2.2 million barrels, the Energy Information Administration said, exceeding the 1.649 million-barrel hit the deck forecast by analysts in a Reuters poll.
Crude production rose by 200,000 bpd to a weekly record of 12.8 million bpd, the EIA express in its weekly report.