Oil futures were slightly lower early Friday but on pace for a third weekly gain in a row, as optimism about a partial resolution between the U.S. and China on trade supported expectations for demand.
“Along with the growth of stock indices, the growth of oil prices also attracts attention,” said Alex Kuptsikevich, senior market analyst at FxPro. “Avoiding sharp movements, it shows a strengthening for the last seven trading sessions, moving closer towards the heights since July.”
West Texas Intermediate crude for February delivery CLF20, +0.61%, the U.S. benchmark grade, fell 22 cents, or 0.4%, to trade at $60.95 a barrel on the New York Mercantile Exchange, after gaining 0.5% on Thursday, when it marked its highest settlement since Sept. 16, according to Dow Jones Market Data. The January contract expired at the end of Thursday’s trade.
February Brent crude BRNG20, -0.83% shed 20 cents, or 0.3%, at $66.34 a barrel on ICE Futures Europe, threatening to snap a sixth straight session of gains, its longest win streak since Jan. 10, following a rise of 0.6% on Thursday. The international oil benchmark also hit its highest finish since Sept. 16.
For the week, WTI is on pace for a weekly gain of 1.9%, while Brent oil is poised for a weekly advance of 1.8%, according to FactSet data. Both contracts are on pace for a third weekly climb in a row.
Oil prices remains bolstered by more optimistic expectations for the global economy and Sino-American trade developments, as well as the decision earlier this month by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, to deepen production cuts.
On Thursday, China revealed a list of import tariff exemptions for six chemical and oil products from the U.S., according to a report from CNBC.
However, some commodity experts warn that global crude supplies could overwhelm demand in 2020, with the oil market oversupplied by 0.3 million barrels a day in the coming year, according to a recent report by UBS analysts.
UBS lifted its oil-price forecast for next year to $60 a barrel for the first quarter and $62 a barrel in the following quarter from $58 and $55, respectively.
Crude oil traders may also watch a final reading of U.S. gross domestic product, as a sign of the health of the largest economies in the world and its impact on demand, The annual pace of U.S. economic growth is expected to hold at 2.1%, according to consensus estimates by Econoday.
Looking further ahead, investors are watching for a weekly oil-drilling report from Baker Hughes due at 1 p.m., which could move energy futures.
In other energy trade, February gasoline RBF20, -0.15% rose 0.2% to $1.714 a gallon, while February heating oil HOF20, -0.25% rose 0.1% to $2.031 a gallon.
Meanwhile, January natural gas NGF20, +2.38% jumped 2.4% to $2.327 per million British thermal units, after sliding 0.6% lower on Thursday, with that decline sparked by U.S. supply figures.
The EIA on Thursday reported that domestic supplies of natural gas fell by 107 billion cubic feet for the week ended Dec. 13. Analysts expected a fall of 93 billion cubic feet, on average, according to a survey conducted by S&P Global Platts.
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