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November 5, 2019

Oil steadies on hopes for US-China trade deal

Oil prices have steadied amid gains on positive economic data and support by hopes for US-China trade deal.

Oil prices have steadied amid gains on positive economic data and support by hopes for US-China trade deal.

Brent crude futures were down one cent at $62.12 a barrel, while US crude futures were down nine cents at $56.45 a barrel, reported Reuters.

OANDA senior market analyst Jeffrey Halley was quoted by Reuters as saying: “This is mostly position lightening after an impressive run higher.

“Oil is vulnerable now to any sharp change in short-term investor sentiment.”

A preliminary Reuters poll reported a rise in US crude stock and a decline in refined products stocks. Reuters noted that the American Petroleum Institute is due to publish official inventory data on 6 November 2019.

China and the US are yet to sign a deal, which is expected to happen later in November 2019. Meanwhile, Russia has cut its oil output from 11.25Mbpd to 11.23 million barrels per day (Mbpd) in September 2019.

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In order to support the market, the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, also known as OPEC+ alliance, came up with a global deal to cut oil production by 1.2 million barrels per day.

A survey conducted by Reuters found that OPEC output rose in October 2019 as part of a rapid recovery in Saudi Arabian production after attacks on oil plants which halved the production of the country.

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