Oil futures are moving higher on Friday
Oil futures rose on Friday after a report that the US may be willing to ease tariffs on China inspired investors to pick up perceived risky assets like commodities.
West Texas Intermediate crude for February delivery CLG9, +1.33% rose 66 cents, or 1.3%, to $52.73 a barrel, after closing down 0.5% to $52.07 on the New York Mercantile Exchange on Thursday. March Brent crude LCOH9, +1.18% rose 69 cents, or 1.1%, to $61.87 a barrel on ICE Futures Europe, after slipping 0.2% to $61.18 a barrel on Thursday.
For the week, WTI and Brent are looking for profits of over 2%.
Oil dropped on Thursday, under pressure from last data showing a rise in weekly US oil production. But crude rose higher in electronic trade on Thursday after The Wall Street Journal reported that US officials are discussing the possibility of lowering Chinese import tariffs to give Beijing an incentive for deeper concessions on the trade dispute.
Optimism lingered even though a Treasury spokeswoman told the WSJ that all negotiating positions remain “at the discussion stage.” The source also said that neither Treasury Secretary Steven Mnuchin nor U.S. Trade Representative Robert Lighthizer have made any specific trade-related recommendations and talks were still ongoing.
Uncertainty about whether the US and China will make headway on a lingering trade dispute sometimes serves to weigh down investor sentiment. And this raised questions about the China’s health, one of the biggest world importers of crude oil. Investors will receive up-to-date information on China’s growth with fourth-quarter gross domestic product data to be released on Monday.
On Wednesday, the Energy Information Administration reported a bigger-than-expected drop in crude inventories of 2.7 million barrels for the week ended Jan. 11, but gasoline stockpiles surged higher by 7.5 million barrels. Then on Thursday, a monthly report from the Organization of the Petroleum Exporting Countries said member oil production dropped in December.
Meanwhile, Saudi Arabia, the de facto OPEC leader, slashed its production by more than expected, by 468,000 bpd to just over 10.5 million bpd, according to independent country data, reported by CNBC.
Across other energy contracts, February gasoline RBG9, +0.86% was up 0.7% to $1.44 a gallon, while February heating oil HOG9, +0.72% added 0.7% to $1.898 a gallon.
February natural gas NGG19, -2.99% dropped 1.5% to $3.363 per million British thermal units.