Oil Set for Second Weekly Gain
(Bloomberg) -- Oil headed for a second weekly advance on signs the U.S. and China are moving closer to a trade deal, and as investors weighed the OPEC+ coalition’s output cuts against surging American supply.
Futures in New York edged higher Friday, and were up 2.7 percent this week. President Donald Trump will meet with China’s top trade negotiator on Friday as the world’s two biggest economies try to resolve differences. U.S. crude stockpiles rose for a fifth week and production jumped to a record high, the Energy Information Administration said Thursday.
After a rocky start to the month, crude has resumed its rally due to aggressive supply cuts from the Organization of Petroleum Exporting Countries and its allies, as well as mounting evidence the U.S. and China want to defuse their trade war. While Saudi Arabia has said it expects oil markets to balance by April, record-breaking American production is tempering the outlook.
“Expectations are really rising that the U.S.-China meetings will result in a deal, and commodities are getting a boost since they’re included in their discussions,” said Hong Sungki, a commodities trader at NH Investment & Securities Co. in Seoul. “Easing of trade tensions will lead to improved global growth and more demand from China for American oil.”
West Texas Intermediate for April delivery rose 13 cents to $57.09 a barrel on the New York Mercantile Exchange at 7:33 a.m. in London after reaching a three-month high of $57.61 on Thursday. Futures have added $1.49 this week.
Brent for April settlement climbed 6 cents to $67.13 a barrel on the London-based ICE Futures Europe exchange. The contract has risen 88 cents this week. The global benchmark crude was at a $10.06 premium over WTI for the same month.
Trump’s meeting with Chinese Vice Premier Liu He was listed on the White House’s daily schedule for 2:30 p.m. in Washington. That comes after reports that negotiators are working on memorandums of understanding -- including on agriculture and non-tariff barriers -- that would form the basis of a final deal.
Even as trade talks boosted investor sentiment, nationwide U.S. crude stockpiles rose to 454.5 million barrels -- the highest since November 2017 -- in the week to Feb. 15, the EIA data showed. U.S. production reached 12 million barrels a day in the same period.
To contact the reporter on this story: Sharon Cho in Singapore at ccho28@bloomberg.net To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net Andrew Janes
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