Oil prices rose on Thursday, buoyed by a drawdown in US crude inventories and signs that China is taking more concrete steps to put a trade war truce with Washington into action.
Crude oil prices have also been supported by OPEC-led supply curbs announced last week, although gains were capped after the producer group lowered its 2019 demand forecast.
International Brent crude oil futures were at $60.46per barrel at 0213 GMT, up 31 cents, or 0.52 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $51.40 per barrel, up 25 cents or, 0.49 percent.
“Crude oil prices rose, helped by the easing trade tension, as well as a fall in inventories,” ANZ bank said on Thursday.
“The news that China is looking to redraft its ‘Made in China’ 2025 plan boosted hopes that trade talks are progressing better than expected.”
China made its first major US soybean purchases in more than six months on Wednesday, while Beijing also appears to be easing its high-tech industrial push, dubbed “Made in China 2025,” which has long irked Washington.
A drop in US crude stockpiles, though less than expected, has helped boost sentiment, analysts said.
US crude inventories fell by 1.2 million barrels in the week to December 7, compared with market expectations for a decrease of 3 million barrels.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) said 2019 demand for its crude would fall to 31.44 million barrels per day, 100,000 bpd less than predicted last month and 1.53 million less than it currently produces.
This adds to the concerns of several market watchers that the decision led by the group to cut production by 1.2 million bpd overall might not be enough to override a glut, especially on the back of soaring US output.
“The US is pumping oil like it’s going out of fashion and that’s providing issues for the traditional supply-demand/OPEC dynamic,” said Hue Frame, portfolio manager at Frame Funds in Sydney.
The United States, where crude production has hit a record 11.7 million bpd, is set to end 2018 as the world’s top oil producer, ahead of Russia and Saudi Arabia.
“At this point, the OPEC cuts appear to have merely put a floor under prices,” Societe Generale analyst Michael Wittner said in a note.
“We still believe that there is significant upside from current levels; however, it is not clear when the movement will take place. If the market needs to see stock draws first, it could be a couple of months.”