SINGAPORE – Oil prices were little changed on Monday following steady gains in the previous week with investors awaiting fresh clues over prospects for a trade deal between the United States and China, shrugging off concerns over steadily rising oil supplies.
Brent crude futures LCOc1 were at $63.30 a barrel at 0512 GMT, unchanged from the previous session. The contract rose 1.3% last week.
West Texas Intermediate (WTI) crude CLc1 were also unchanged at $57.72 a barrel, having gained 0.8% last week.
The “crude oil market is flat on Monday morning, as price consolidates after Friday’s big rally,” said Margaret Yang, market analyst at CMC Markets.
Oil futures gained nearly 2% on Friday as comments from a top US official raised optimism for a US-China trade deal, but worries about increasing crude supplies capped prices.
The 16-month trade war between the world’s two biggest economies and oil consumers has slowed growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.
China and United States had “constructive talks” on trade in a high-level phone call on Saturday, state media Xinhua said, but offered few other details in a report released on Sunday.
“In the short term, US-China trade talks and OPEC meeting in early December are the two biggest events oil traders are watching for,” said Yang.
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.
A monthly report from the International Energy Agency (IEA) released on Thursday put downward pressure on prices, after it estimated that non-OPEC supply growth would increase to 2.3 million barrels per day (bpd) next year compared, with 1.8 million bpd in 2019, citing production from the United States, Brazil, Norway and Guyana.
Data released on Thursday also showed weekly US crude stockpiles grew by 2.2 million barrels, the Energy Information Administration (EIA) said, exceeding the 1.649 million-barrel rise forecast by analysts in a Reuters poll. [EIA/S]