Oil Rises After China Says Will Talk to US

Oil rose towards $57 a barrel on Friday after China said it would hold talks with the United States to look for solutions to a trade dispute, while signs of lower crude supply also supported prices.

OPEC cut crude output in December, a Reuters survey showed, and the American Petroleum Institute reported a drop in US crude inventories, CNBC reported.

Brent crude, the global benchmark, rose 84 cents to $56.79 a barrel on Friday. WTI was up 81 cents at $47.90.

“Jitters over the health of the global economy look set to endure but are being lost on the oil market, at least for the time being,” said Stephen Brennock of oil broker PVM, the world's leading broker of oil instruments.

“That said, whether this bout of price strength can be sustained is far from certain.”

Oil gained further support from the latest supply report from the API industry group, which said on Thursday that US crude stocks fell by 4.5 million barrels last week.

Both benchmarks are on track for solid gains in the first week of 2019 trading despite rising concerns that the China-US trade war will lead to a global economic slowdown.

But in comments that helped oil to rally, China’s Commerce Ministry said it would hold vice-ministerial trade talks with US counterparts in Beijing on Jan. 7-8.

The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods, raising concern of slowing growth and roiling financial markets.

source: Financial Tribune