Oil prices rise more than one percent on trade talks, supply cuts
Oil prices started the week strongly on Monday, lifted by optimism that talks would soon resolve the trade frictions between the U.S. and China, while supply cuts by major producers also supported the market.
International Brent crude futures were at 57.75 U.S. dollars per barrel, up 69 cents, or 1.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at 48.60 U.S. dollars per barrel, up 64 cents, or 1.3 percent.
Financial markets were being lifted early on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, due to start on Monday, would lead to an easing in tensions between the two biggest economies in the world.
More fundamentally for oil markets, traders said crude future prices were being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC Russia.
But not all factors are pointing to higher prices.
In the U.S., crude oil production stayed at a record 11.7 million barrels per day (bpd) in the last week of 2018, according to weekly data by the Energy Information Administration (EIA) released on Friday.
That makes the U.S. the world's biggest oil producer ahead of Russia and Saudi Arabia.
Record output is also swelling U.S. fuel stockpiles.
Crude oil inventories rose by 7,000 barrels in the week ending December 28, to 441.42 million barrels.
Distillate and gasoline stocks, however, raised by a whopping 9.5 million and 6.9 million barrels, to 119.9 million and 240 million barrels respectively, the EIA data showed.
“The U.S. supply glut remains a bearish concern,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.