Oil traded higher Thursday, finding support from a report that the Organization of the Petroleum Exporting Countries and its allies are likely to extend production cuts as well as renewed optimism around U.S.-China trade talks.
West Texas Intermediate crude for January delivery CLF20, +1.14% rose 40 cents, or 0.7%, to $57.41 a barrel, while January Brent crude BRNF20, +0.83%, the global benchmark, was up 21 cents, or 0.3%, at $62.61 a barrel on ICE Europe.
OPEC and its allies, including Russia, are likely to agree to extend crude production cuts until mid-2020 when they meet next month, Reuters reported Thursday, citing OPEC sources. An existing agreement on output curbs runs through March 2020. OPEC and its allies will meet Dec. 5 in Vienna.
Support for oil and other assets perceived as risky was also found after The Wall Street Journal reported that China’s top trade negotiator invited his U.S. counterparts to a new round of face-to-face talks. News reports Wednesday said negotiations had stalled.
“Prices got a further boost after Russia signaled it will continue to cooperate with OPEC to restrict output,” said Raffi Boyadjian, senior investment analyst at XM, in a note. “OPEC and its allies will meet in Vienna on December 5-6 and expectations are that the alliance will agree to extend the current output cap beyond March 2020. However, without a significant improvement in the global economic outlook, the OPEC cuts will continue to have a limited impact in lifting prices.”
In other energy trade, December gasoline RBZ19, +0.41% rose 0.6% to $1.666 a gallon, while December heating oil HOZ19, +1.18% was up 1.2% to $1.9133 a gallon.
December natural gas NGZ19, -0.90% fell 0.9% to $2.6255 per million British thermal units.
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