Oil Rises Amid Optimism Over Oil Supply Cuts
Oil prices gained on Friday after OPEC’s forecast for oil demand next year fueled hopes that the producer group and allies will maintain supply cuts when they meet to discuss policy on output next month.
Optimism that the United States and China may soon sign an agreement to end their trade war helped support prices after White House economic adviser Larry Kudlow said a deal was “getting close”, citing what he called very constructive discussions with Beijing, CNBC reported.
Brent crude futures were up 19 cents, or 0.3%, at $62.47 a barrel, having dropped 9 cents on Thursday.
West Texas Intermediate crude was up 21 cents, or 0.4%, at $56.98 a barrel, after falling 0.6% in the previous session.
The rosy mood came after the Organization of the Petroleum Exporting Countries said Thursday it expected demand for its oil to fall in 2020.
Many analysts said that supports the view among markets that there is a clear 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+ on January 1 this year cut output by 1.2 million barrels per day, and in July, renewed the pact until March 2020.
OPEC said demand for its crude would average 29.58 million bpd next year, 1.12 million bpd less than in 2019. That points to a 2020 surplus of about 70,000 bpd, which is less than indicated in previous reports. The producer group will meet in Vienna next month.
source: Financial Tribune
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