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June 28, 2019

Oil prices hold firm as markets await G20 talks

Oil prices have held near $67 per barrel as markets are awaiting G20 talks and also due to the trade war between the US and China.

Oil prices have held near $67 per barrel as markets are awaiting G20 talks and also due to the trade war between the US and China.

Brent crude LCOc1 futures increased 7 cents at $66.62 per barrel, while US West Texas Intermediate crude CLc1 futures edged up 12 cents at $59.55 a barrel, Reuters reported.

The leaders of the G20 countries are meeting on 28 and 29 June in Osaka, Japan.

Markets are keen about the discussions between US President Donald Trump and Chinese President Xi Jinping. A trade dispute between the two countries has weighed on prices, increasing fears that slowing economic growth could dent demand for oil.

ANZ Bank was quoted by Reuters as saying: “While there are no expectations of a truce between the two parties, it will set the scene for the OPEC meeting a couple of days later.”

Trump said that there is a possibility of a trade deal with Xi this weekend but US tariffs will be imposed on most remaining Chinese imports in there is any disagreement between the two countries.

ANZ added: “Even if US-China trade talks turn positive, we think OPEC will extend the current production cuts until the end of the year. However, deeper cuts look unlikely, given the rising supply issues.”

The Organization of Petroleum Exporting Countries (OPEC) and some non-members including Russia, known as OPEC+, are set to meet on 1-2 July in Vienna to decide on an agreement to extend supply cuts.

Beginning 1 January 2019, OPEC+ members agreed to cut oil output by 1.2 million barrels per day.

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