Oil prices inched higher on Monday, extending steady gains from the previous week, with investors awaiting fresh clues over prospects for a trade deal between the United States and China and shrugging off concerns over steadily rising oil supplies.
Brent crude futures LCOc1 were up 11 cents, or 0.2%, to $63.41 a barrel at 0751 GMT. The contract rose 1.3% last week.
West Texas Intermediate (WTI) crude CLc1 were 21 cents, or 0.4%, higher at $57.93 a barrel, having gained 0.8% last week.
Early in the session, crude prices were mostly flat to their previous close as the market consolidated after Friday’s rally, said Margaret Yang, market analyst at CMC Markets.
Oil futures gained nearly 2% on Friday as comments from a top U.S. official raised optimism for a U.S.-China trade deal, but worries about increasing crude supplies capped prices.
“In the short term, U.S.-China trade talks and (the) OPEC meeting in early December are the two biggest events oil traders are watching for,” said Yang.
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.
China and the United States had “constructive talks” on trade in a high-level phone call on Saturday, state media Xinhua said, but it offered few other details in a report released on Sunday.
In a signal that policymakers are ready to act to prop up slowing growth, China’s central bank unexpectedly trimmed a closely watched lending rate on Monday, the first such cut in more than four years.
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The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday it expected demand for its oil to fall in 2020, supporting a view among market participants that there is a case for the group and other producers like Russia – collectively known as ‘OPEC+’ – to maintain limits on production that were introduced to cope with a supply glut.
OPEC and its allies are expected to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.
U.S. energy firms this week reduced the number of oil rigs operating for a fourth week in a row, cutting 10 oil rigs in the week to Nov. 15, energy services firm Baker Hughes Co BRK.N said on Friday. The total count is now 674, the lowest since April 2017.
Money managers raised their net long U.S. crude futures and options positions by 39,995 contracts to 169,386 in the week to Nov. 12, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
