Oil prices inch up, set for weekly gain on US-China trade optimism

WASHINGTON: Oil prices edged up on Friday following a sharp drop in the previous session, heading for a weekly gain of more than 1 per cent as US-China trade optimism outweighed the prospects of Iranian supply returning to the market.

Brent crude futures rose 17 cents, or 0.26 per cent, to $64.70 a barrel by 0007 GMT. US West Texas Intermediate crude futures rose 18 cents, or 0.29 per cent, to $61.80.

Oil prices had surged earlier in the week after the US and China, the world’s two biggest oil consumers and economies, agreed to a 90-day pause on their trade war during which both sides would sharply lower trade duties. The hefty tit-for-tat Sino-US tariffs had raised fears of a sharp blow to global growth and oil demand.

However, oil trade remains hostage to supply dynamics, including the possibility of Iranian supplies returning to market following any deal between Washington and Tehran.

“The easing geopolitical risks weighed on sentiment already burdened by fears of rising supply from fellow OPEC members,” ANZ bank said in a note to clients.

The International Energy Agency said on Thursday it expects global supply to rise by 1.6 million barrels per day this year, up 380,000 bpd from the previous forecast, as Saudi Arabia and other OPEC+ members unwind output cuts.

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