Oil extends gains on prospect of deeper OPEC output cuts, trade talks hopes

By Jane Chung
SEOUL, Oct 11 (Reuters) - Oil prices rose early on Friday,
building on gains in the previous session, after producer club
OPEC hinted at making deeper cuts in supply while optimism was
revived over talks between the United States and China to end
their trade war.
International benchmark Brent crude futures LCOc1 were at
$59.34 a barrel by 0034 GMT, up 24 cents, or 0.4%, from their
previous settlement. Brent settled up 1.3% at $59.10 a barrel on
Thursday.
West Texas Intermediate (WTI) crude CLc1 futures rose 20
cents, or 0.37%, from their last close to $53.74 per barrel. In
the previous session, WTI settled 1.8% higher at $53.55 a
barrel.
On Thursday Mohammad Barkindo, Secretary-General of the
Organization of the Petroleum Exporting Countries (OPEC), said
all options were on the table, including a deeper supply cut to
balance oil markets. A decision would be taken at a December
meeting between the OPEC and its partners, he said. OPEC lowered its 2019 global oil demand growth forecast to
0.98 million barrels per day (bpd), while leaving its 2020
demand growth estimate unchanged at 1.08 million bpd, according
to OPEC's monthly report. Beyond OPEC, trade talks between the United States and China
also remained on market radar as the world's top two economies
seek to resolve a more-than-a-year-long trade row that has
slowed global economic growth and curbed fuel consumption.
"The United States is the largest global consumer of oil
while China, the biggest driver of year-on-year oil demand
growth," said Stephen Innes, Asia Pacific market strategist at
AxiTrader.
"The most significant sentiment driver hinges on the outcome
of the trade talks which, if (they) end on a positive note,
could go along way to begin to repair the economic damage done
... these economic powerhouses would need more oil," said Innes.
Top U.S. and Chinese negotiators wrapped up the first of two
days of scheduled trade talks on Thursday, with business groups
expressing optimism that the two sides might be able to ease
tensions and delay a U.S. tariff hike set for next week.