By Laila Kearney
NEW YORK (Reuters) - Oil prices touched more than three-month highs on Friday, supported by rising hopes that the United States and China would soon reach a deal to end their trade war, but new record U.S. oil production limited gains.
Brent crude futures briefly reached $67.73 a barrel, their strongest since mid-November. The global benchmark traded 10 cents higher at $67.17 a barrel by 11:47 a.m. EST (1647 GMT). Brent was on track for a weekly gain of about 1.4 percent.
U.S. West Texas Intermediate (WTI) crude futures were up 41 cents to $57.37 per barrel, after hitting $57.81 earlier on Friday, also their highest since mid-November. WTI was heading for a more than 3-percent weekly rise.
U.S. crude oil production hit a record 12 million barrels per day (bpd) and inventories jumped last week to their highest since October 2017, according to U.S. Energy Information Administration data released on Thursday.[EIA/S]
The broad outline of a possible U.S.-China trade deal was beginning to emerge from talks between the two countries, sources told Reuters on Thursday.
Both sides are pushing for an agreement by March 1, the end of a 90-day truce agreed by U.S. President Donald Trump and Chinese President Xi Jinping late last year.
"Should risky assets receive some additional optimistic news out of the ongoing U.S.-China trade talks amidst potential weakening in the U.S. dollar, WTI could easily achieve our stated target to the $58 area today," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Prices continue to be supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. The group, known as OPEC+, agreed in December to cut output by 1.2 million bpd to prevent a crude supply glut from growing.
Surging U.S. crude oil production, is partly offsetting OPEC's cuts.
"We see total U.S. crude production hitting 13 million bpd by year-end, with 2019 averaging 12.5 million bpd," U.S. bank Citi said following the release of the EIA report.
The bank said that some weeks could see 4.6 million bpd of gross crude exports by year-end, topping last week's record of 3.6 million bpd.
The market is awaiting data for this week's U.S. rig count, an indicator of future production, due after 1 p.m. EST. Last week, drillers increased the number of oil rigs operating for a second week in a row, General Electric Co's GE.N Baker Hughes energy services firm said.
With U.S. supply surging, Goldman Sachs said it expected non-OPEC supply to grow by 1.9 million bpd this year, more than offsetting the OPEC cuts.
That means much will depend on demand, which Goldman said it expected to grow by 1.4 million bpd this year.
Given the supply and demand picture, Goldman said it expected an average Brent price of $60-$65 per barrel in 2019 and 2020.
(Additional reporting by Julia Payne and Ahmad Ghaddar in London, Henning Gloystein in Singapore; Editing by Emelia Sithole-Matarise and Marguerita Choy)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Feb 23, 2019 00:06:29 IST