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UPDATE 7-Oil prices steady; set for weekly gain ahead of G20 talks, OPEC

Published 29/06/2019, 03:58 am
© Reuters.  UPDATE 7-Oil prices steady; set for weekly gain ahead of G20 talks, OPEC
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* Brent set for 25% hike, WTI on track for 30% jump in H1 2019

* U.S.-China trade war endangers demand

* Many analysts expect extension of OPEC+ output cut

* Tensions over Iran have boosted prices

* U.S. oil output in April exceeds 12 mln bpd to record -EIA (Updates prices, adds data, Russia news)

By Devika Krishna Kumar

NEW YORK, June 28 (Reuters) - Oil prices were little changed on Friday and were on track for a second straight week of gains, ahead of talks over the trade dispute between the U.S. and Chinese presidents this weekend and on production cuts from OPEC on Monday.

Brent August crude LCOc1 futures were up 19 cents at $66.74 a barrel by 1:50 p.m. ET (1750 GMT), ahead of expiry. U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 14 cents at $59.29 a barrel. The most active September Brent crude futures LCOU9 was down 16 cents at $65.51 a barrel.

Brent was on course for a gain of around 25% in the first half of 2019 and WTI for a 30% gain. Both contracts were also set to notch their second straight weekly gain.

The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday. trade war between the world's two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil.

Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs. we don't anticipate significant progress out of tomorrow's Trump-Xi discussions, we are not ruling out some reduction in risk appetite next week with U.S. equities relinquishing a sizable portion of this week's gains," Jim Ritterbusch of Ritterbusch and Associates said in a note.

"Furthermore, we are not looking for any surprises out of the Monday-Tuesday OPEC+ meeting as a simple rollover of the existing agreement through the rest of this year would appear to be the most probable outcome."

The Organization of the Petroleum Exporting Countries and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts.

Russia is cutting its oil output in June by slightly more than envisaged in the OPEC+ deal, RIA news agency cited Russian Energy Minister Alexander Novak as saying. market sentiment is that OPEC+ will agree to extend cuts, but after all what matters is how deep the cuts will be and how much Saudi Arabia and Russia will curb," said Kim Kwang-rae, a commodity analyst at Samsung (KS:005930) Futures in Seoul.

OPEC+ members agreed to curb oil output by 1.2 million barrels per day from Jan. 1.

Oil prices could stall as a slowing global economy squeezes demand and U.S. crude floods the market, a Reuters poll of analysts found, despite an expected extension by OPEC and its allies of their output-cutting pact. survey of 42 economists and analysts forecast Brent crude would average $67.59 a barrel in 2019, down from the $68.84 estimate in May.

Tensions between the United Sates and Iran have also been keeping markets on edge.

A week after Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis. U.S. crude production has also capped oil prices.

U.S. crude output in April rose to a fresh monthly record, surpassing 12 million barrels per day, according to a government report on Friday. energy firms this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 793, General Electric (NYSE:GE) Co's GE.N Baker Hughes energy services firm said in its closely followed report. RIG-OL-USA-BHI

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