China and the United States have agreed in the past two weeks to
cancel tariffs in different phases, the Chinese commerce
ministry said on Thursday without giving a timeline.
The trade dispute has prompted analysts to lower forecasts for
oil demand and raised concerns that a supply glut could develop
in 2020. Oil fell on Wednesday, partly because of worries that a
U.S.-China trade deal might be delayed.
"Today we start with a different set of headlines that they came
to some agreement on the framework," said Olivier Jakob, oil
analyst at Petromatrix. "That is definitely what is supporting
prices."
Brent crude <LCOc1>, the global benchmark, rose 62 cents to
$62.36 by 1101 GMT after settling down $1.22 on Wednesday. West
Texas Intermediate crude <CLc1> climbed 66 cents to $57.01.
Beijing's comments boosted market sentiment, which had also been
ruffled by Wednesday's U.S. government supply report showing
crude inventories rose last week by 7.9 million barrels, much
more than expected by analysts.
Brent has rallied 15% in 2019, supported by a deal between the
Organization of the Petroleum Exporting Counties and allies such
as Russia to limit supplies until March next year. The producers
meet on Dec. 5-6 in Vienna to review the policy.
OPEC Secretary-General Mohammad Barkindo said this week he was
more optimistic about the outlook for 2020 because of
developments on trade disputes, appearing to downplay any need
to cut output more deeply.
Still, doubts about a trade deal could resurface, analysts said.
Reuters reported on Wednesday a meeting between U.S. President
Donald Trump and Chinese President Xi Jinping to sign the deal
could be delayed to December, contributing to oil's decline.
"Doubts are not yet turning into full-blown concerns," said
Craig Erlam, analyst at brokerage OANDA. "If a date isn't set in
stone soon though, that may come."
(Additional reporting by Jane Chung; Editing by Dale Hudson)
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