Oil prices rise as investors bank on China stimulus

Oil prices rise as investors bank on China stimulus

Oil prices rise as investors bank on China stimulus

Brent crude was up 27 cents, or 0.4%, at $59.89 a barrel by 0930 GMT, on course for a drop of about 3.4% for the week.

The U.S. and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it next month, a U.S. administration official said.

US West Texas Intermediate crude was down 67 cents, or 1.2pc, at $54.87 a barrel.

-China trade war, which has hurt global oil demand, Kallanish Energy reports. The EIA reported that West Coast gasoline imports jumped to 191,000 barrels a day, the most since May, as cargoes were diverted from NY after prices spiked in California.

Futures edged higher in NY on Friday, but are down about 4% this week.

-China trade talks added to a rise in US oil inventories to weigh on prices. This exacerbated fears that the Chinese economic growth will further weaken, especially without a U.S.

The ongoing tub of war between hope for a reconciliation between China and the USA at one end and worry over a weakening economy on the other weighed in favour of the latter within the crude trading community on Thursday, with modest losses for both benchmarks inspired by weak factory data from China.

The pipeline also flows to Cushing, where the outage is expected to drain inventories.

A Reuters survey showed that oil prices are likely to remain under pressure this year and next.

Prices were also supported by expansion in China's factory activity at the fastest pace since 2017, raising optimism over the health of the world's second-largest economy. Crude supplies were forecast to increase by 2.5 million barrels, according to analysts polled by S&P Global Platts.

United States job growth slowed less than expected in October, offering assurance that consumers would continue to prop up the slowing economy for a while.

US crude oil imports averaged 6.70 million barrels per day (b/d) last week, up by 840,000 b/d from the previous week, while crude oil exports averaged about 3.33 million b/d, down by about 356,000 b/d from the previous week, according to the Weekly Petroleum Status Report.

USA crude production soared almost 600,000 barrels per day in August to a record 12.4 million, buoyed by a 30% increase in Gulf of Mexico output, government data released on Thursday showed.

Rate cuts can often be bullish for oil prices because a stronger economy typically implies higher demand for crude.

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