Oil holds above $63 on U.S.-China trade talks optimism
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[November 25, 2019] By
Seng Li Peng and Dmitry Zhdannikov
SINGAPORE/LONDON (Reuters) - Oil prices
held above $63 per barrel on Monday as positive comments from the United
States and China rekindled hopes in global markets that the world's two
largest economies could soon sign an interim deal to end their trade
war.
Brent crude futures <LCOc1> were up 12 cents at $63.51 a barrel by 1127
GMT. West Texas Intermediate (WTI) crude <CLc1> was flat at $57.80.
"It is still all about trade talks," said Michael McCarthy, chief market
strategist at CMC Markets in Sydney. "It seems to be dominating markets
action at the moment."
A move by China to protect intellectual property was also providing a
supportive atmosphere for the trade talks, McCarthy added.
Analysts at Barclays said they saw Brent oscillating around $60 per
barrel for the next two years.
U.S. national security adviser Robert O'Brien said on Saturday that an
initial trade agreement with China was still possible by the end of the
year.
On Friday, U.S. President Donald Trump and Chinese President Xi Jinping
expressed a desire to sign an initial trade deal and defuse a 16-month
tariff war that has lowered global growth.
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Pumpjacks are seen against the setting sun at the Daqing oil field
in Heilongjiang province, China December 7, 2018. Picture taken
December 7, 2018. REUTERS/Stringer
Still, concern remains that events in Hong Kong, riven by months of
anti-government unrest, could overshadow trade talk progress.
O'Brien warned on Saturday that Washington would not turn a blind eye to what
happens in Hong Kong, where demonstrators were angry at what they see as an
erosion of freedoms.
The Organization of the Petroleum Exporting Countries meets on Dec. 5 at its
headquarters in Vienna, followed by talks with a group of other oil producers,
led by Russia, known as OPEC+.
The group is widely expected to extend its supply cut to mid-2020 although the
market is keen to see deeper cuts.
(Reporting by Seng Li Peng; Editing by Kenneth Maxwell, Simon Cameron-Moore and
Emelia Sithole-Matarise)
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