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Oil prices rise on Sino-American trade hopes, upbeat China data

Published 14/02/2019, 04:44
© Reuters. Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang
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By Henning Gloystein

SINGAPORE (Reuters) - Oil prices rose on Thursday, buoyed by hopes that potential progress in the latest Sino-U.S. tariff talks would improve the global economic outlook, and as China's trade figures including crude imports beat forecasts.

U.S. West Texas Intermediate (WTI) crude futures were at $54.16 per barrel at 0413 GMT, up 26 cents, or 0.5 percent, from their last settlement.

International Brent crude oil futures were up 37 cents, or 0.6 percent, at $63.98 a barrel.

Optimism that a trade deal could be reached between the United States and China was boosted when U.S. President Donald Trump said talks were going "very well".

"The 90-day truce (on trade) agreed in December will run out on March 1, but given the progress of the talks there could be an extension, which is why there (is) rising optimism that the two leaders will meet later that month," said Alfonso Esparza, senior market analyst, OANDA.

Markets were also supported by upbeat Chinese trade data, including for crude oil.

China's crude oil imports in January rose 4.8 percent from a year earlier, customs data showed on Thursday, to an average of 10.03 million barrels per day (bpd), the third straight month that imports have exceeded the 10 million bpd mark.

Not all data pointed to tighter market conditions and higher prices.

Climbing U.S. oil stockpiles weighed on prices. U.S. crude oil inventories rose last week to the highest since November 2017 as refiners cut runs to the lowest since October 2017, the Energy Information Administration said on Wednesday.

Crude inventories built for a fourth week in a row, rising 3.6 million barrels to 450.8 million barrels in the week to Feb. 8. Analysts polled by Reuters forecast an increase of 2.7 million barrels.

U.S. crude oil production remained at a record of 11.9 million barrels per day (bpd).

The global oil market will struggle this year to absorb fast-growing crude supply from outside the Organization of the Petroleum Exporting Countries (OPEC), even with the group's production cuts and U.S. sanctions on Venezuela and Iran, the International Energy Agency said in a report on Wednesday.

© Reuters. Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang

The IEA said it expected global oil demand this year to grow by 1.4 million bpd, while non-OPEC supply will grow by 1.8 million bpd.

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