Oil set for biggest weekly gain in two years on growing optimism

U.S. West Texas Intermediate crude for October delivery was up 31 cents, or 0.4 percent, at $71.43 a barrel by 0018 GMT, after settling up $1.27. Front-month London Brent crude, for November delivery, was down 2 cents at $79.38, having ended up 37 cents.

SINGAPORE: Oil headed for its biggest weekly gain in more than two years as the OPEC+ coalition’s commitment to cut output and signs the U.S. and China will be able to defuse their trade war aided sentiment.

Futures have advanced more than 9 percent this week as the Saudi-led producer coalition pledged Thursday to keep markets in balance. That came after three days of trade talks between the U.S. and China increased optimism the two sides can reach a deal, which should boost flagging global growth.

Crude extended its winning streak to nine sessions on Thursday after losing almost 40 percent in the last quarter of 2018 as concerns over a global supply glut and an increasingly gloomy global growth outlook stoked bearishness. 

Investor sentiment has improved as the Organization of Petroleum Exporting Countries and its allies including Russia said they will keep the market in balance with cuts that will be implemented from this month.

“Oil has had a good rally as Saudi Arabia’s willingness to move forward with cutting output was clearly delivered to the market,” said Hong Sungki, a commodities trader at NH Investment & Securities Co. in Seoul. 

“But the trade negotiations between the U.S. and China still add some uncertainty to global financial and oil markets, possibly leading to corrections in prices in the shorter term.”

West Texas Intermediate for February delivery traded 15 cents lower at $52.44 a barrel on the New York Mercantile Exchange as of 11:22 a.m. in Singapore on Friday. Oil has risen 9.3 percent this week, the most since December 2016.

Brent for March settlement fell 26 cents to $61.42 a barrel on the ICE Futures Europe Exchange in London. It’s risen 7.6 percent this week after gaining 9.3 percent, the most in two years, in the previous week. The global benchmark crude traded at a premium of $8.68 a barrel to WTI for the same month. - Bloomberg