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UPDATE 4-Oil prices little changed amid concerns about rising supplies

Published 16/11/2019, 12:56 am
© Reuters.  UPDATE 4-Oil prices little changed amid concerns about rising supplies
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* IEA sees major challenge to OPEC+ oil demand in 2020

* Prospects rise for extension of OPEC+ cuts

* White House adviser upbeat on U.S.-China trade talks (Updates prices, adds comment)

By Julia Payne

LONDON, Nov 15 (Reuters) - Oil prices fluctuated around flat on Friday as investors weighed concerns about rising supplies next year and signs of progress towards ending the U.S.-Chinese trade row.

White House economic adviser Larry Kudlow said on Thursday a deal was "getting close", citing what he described as very constructive discussions with Beijing. Brent crude LCOc1 was down 2 cents at $62.26 a barrel by 1352 GMT, while West Texas Intermediate crude CLc1 rose 13 cents to $56.90 a barrel.

"We're in a very technical market that is around the 200-day moving average for the last sessions. There's a battle between the big players at the moment on direction," Olivier Jakob of Petromatrix consultancy said.

The International Energy Agency weighed on prices, by saying the Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, faced "a major challenge in 2020 as demand for their crude is expected to fall sharply."

OPEC Secretary General Mohammad Barkindo had painted a more upbeat picture this week, saying growth in rival U.S. production would slow in 2020, although a report by the group had also said demand for OPEC oil was expected to dip. and its allies have cut supply to prop up prices and are expected to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.

"Will they maintain cuts or go deeper? If OPEC doesn't budge, we'll see a significant stock build in the first half," said Harry Tchilinguirian, global head of markets strategy at BNP Paribas (PA:BNPP).

He said it was still not clear how long it would take for any deal to end the U.S.-China trade row, which has weighed on the global economy and undermined demand for fuel.

"Essentially we've had a range bound market for the last nine sessions due to the lack of clarity on these two key issues," Tchilinguirian said.

OPEC said demand for its crude would average 29.58 million barrels per day (bpd) next year, 1.12 million bpd less than in 2019, pointing to a 2020 surplus of about 70,000 bpd.

U.S. production has continued climbing, reaching a weekly record of 12.8 million bpd last week, while U.S. oil inventories rose faster than expected last week. EIA/S rising U.S. output and competition from production in Brazil, Norway and Guyana next year has been squeezing profits for U.S. shale producers, which plan another spending freeze in 2020 and a slowdown in production growth. GRAPHIC: Surplus or deficit?

https://tmsnrt.rs/2NQmBiR CHART: U.S. oil may retest resistance at $57.84

CHART: Brent oil may retest resistance at $63.2

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