Oil prices rose early on Friday, heading for a second weekly increase, driven up by optimism that the U.S. and China will forge a trade deal and that OPEC’s resolve to rebalance the market will outweigh soaring U.S. oil production.
At 08:00 a.m. EST on Friday, WTI Crude was up 0.98 percent at $57.52, while Brent Crude was trading up 0.61 percent at $67.60—with both benchmarks at their highest since November last year.
Although gains are capped by data that U.S. crude oil production hit 12 million bpd and American crude exports hit a new record high last week, market participants are hopeful that the U.S. and China can bridge the gaps in their ongoing trade talks.
The two biggest economies in the world have begun to outline some broad commitments in principle on some of the thorniest issues in the trade dispute, Reuters reported on Thursday, citing sources familiar with the negotiations in Washington. Representatives of both delegations have been drafting memorandums of understanding on key issues including intellectual property rights, services, agriculture, currency, forced technology transfer and cyber theft, and non-tariff barriers to trade, two sources told Reuters.
On Friday afternoon, U.S. President Donald Trump is set to meet with Chinese Vice Premier Liu He, who is leading the Chinese team of negotiators. Earlier this week, President Trump said that March 1, the deadline he had set for trade talks to reach a deal or start imposing new tariffs on Chinese imports, is “not a magical date,” suggesting that the Administration could be flexible and not slap more tariffs if a deal is not reached by that date.
Oil prices firmed up early on Friday after they had dropped on Thursday, following the EIA inventory report of a crude oil inventory build of 3.7 million barrels and U.S. crude oil production hitting a record 12 million bpd in the week ending February 15, rising by 100,000 bpd from 11.9 million bpd in the previous week.
By Tsvetana Paraskova for Oilprice.com
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