Talks of further supply cuts from OPEC provide boost to oil prices. Credit: skeeze from Pixabay.

Oil prices have edged up as investors expected a potential Brexit deal between Britain and the European Union (EU).

Brent crude oil futures rose $0.21 to $58.95 a barrel, while US West Texas Intermediate (WTI) crude futures gained $0.16 to $52.97 a barrel, reported Reuters. Oil prices also gained support on signals from the Organization of the Petroleum Exporting Countries (OPEC) as well as its allies that there could be further supply cuts.

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OANDA New York senior market analyst Edward Moya said: “Oil is starting to see some bullish positions added on the easing of two big tail risks for global demand, the US-China trade war and Brexit.

“While a broader trade deal seems unlikely in the immediate future, the risks for the US-China trade war have been fading.”

Negotiators from the UK and the EU are closing in on a draft Brexit deal amid optimism that there could be a breakthrough. Talks are not yet completed, and problems may arise to hit the deadline.

According to market analysts, any deal that avoids a no-deal Brexit should bolster economic growth as well as turn oil growth and prices.

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OPEC Secretary General Mohammad Barkindo provided more support saying that the OPEC and its allied producers will sustain oil market stability beyond 2020 by doing whatever is in its power. Besides OPEC, Russia and other major producers have reduced oil production by 1.2 million barrels per day to offer support to the market.

As reported by a preliminary Reuters poll, US crude stockpiles grew for the fifth straight week.