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    Oil prices up on hopes of US-China breakthrough, tightened supply

    Oil prices up on hopes of US-China breakthrough, tightened supply

    Oil prices up on hopes of US-China breakthrough, tightened supply
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    By Reuters  IST (Published)

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    Oil prices rose 1.5 percent on Friday, lifted by signs the United States and China could soon settle their protracted trade dispute while producer cuts and US sanctions on Venezuelan exports have helped tighten supply.

    Oil prices rose 1.5 percent on Friday, lifted by signs the United States and China could soon settle their protracted trade dispute while producer cuts and US sanctions on Venezuelan exports have helped tighten supply.
    International Brent crude oil futures were up 91 cents, or 1.5 percent, at $61.75 per barrel by 1445 GMT.
    US West Texas Intermediate (WTI) futures were at $54.42, up 63 cents or 1.17 percent.
    Global markets gained support from comments on Twitter by U.S. President Donald Trump on Thursday, saying he would meet Chinese President Xi Jinping soon to try to resolve a trade standoff, though Trump later warned that he could postpone talks if a comprehensive deal remains elusive. [nL3N1ZV6YD
    China's trade delegation said the latest round of talks with the United States made "important progress", state news agency Xinhua reported on Friday.
    "Many traders recognise that sense is likely to prevail and a deal will be struck after the summit - although the shape of any deal will continue to drive a jittery market," Cantor Fitzgerald Europe said in a note.
    But a survey on Friday that showed China's factory activity shrank by the most in almost three years in January, reinforcing fears that a slowdown in the world's second-largest economy is deepening, and China's woes amid the prevailing trade tensions are likely to hit fuel demand.
    "The spectre of further US sanctions on Chinese goods still looms large and both sides will have their work cut out to settle their differences by a March 1 deadline," PVM Oil Associates strategist Stephen Brennock said.
    "In any case, expect oil prices to dance to the tune of the US-China trade fiasco over the next few weeks."
    Analysts believe that the oil market will be more balanced in 2019 after supply cuts from the Organization of the Petroleum Exporting Countries (OPEC). A Reuters poll showed that OPEC pumped 30.98 million barrels per day (bpd) in January, down 890,000 bpd from December.
    In Venezuela, meanwhile, US sanctions imposed on state oil company PDVSA this week are keeping tankers stuck at ports as American refineries that rely on Venezuelan feedstock cut back operations.
    "The latest US sanctions could directly halt around 500,000 bpd of Venezuelan exports to the US," Citi said.
    Adding to Venezuela's troubles, much of its crude is heavy and requires the light petroleum naphtha, largely supplied from the United States, for dilution before export to refineries.
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