Picture: REUTERS
Picture: REUTERS

London — Oil prices rose 2% on Wednesday as the extension of US-China talks in Beijing raised hopes that the world’s two largest economies would resolve their trade standoff.

US West Texas Intermediate (WTI) crude oil futures were at $50.82 a barrel at 9.45am GMT, up $1.04, or 2.09%, the first time this year that WTI has topped $50. International Brent crude futures were up $1.09, or 1.86%, at $59.81 a barrel.

Both crude price benchmarks added to Tuesday’s 2% gains and have now been on the rise for eight straight days — their longest rally since June 2017.

“After a dreadful December for risk markets, crude oil continues to catch a positive vibe,” said Stephen Innes at futures brokerage Oanda in Singapore, citing tensions between the superpowers that have cast a pall over the world economy.

The trade talks in Beijing were carried over into an unscheduled third day on Wednesday, amid signs of progress on issues including purchases of US farm and energy commodities and increased US access to China’s markets.

“Talks with China are going very well!” US President Donald Trump tweeted, without elaborating. State newspaper China Daily said on Wednesday that Beijing was keen to put an end to its trade dispute with the US, but that any agreement must involve compromise on both sides.

Citing the trade friction, the World Bank expects global economic growth to slow to 2.9% in 2019 from 3% in 2018.

“At the beginning of 2018, the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,” World Bank CEO Kristalina Georgieva said in a semi-annual report released late on Tuesday.

More fundamentally, oil prices have been receiving support from supply cuts started at the end of 2018 by oil cartel Opec and allies, including Russia. The Opec-led cuts are aimed at reining in an emerging supply overhang, in part because US crude output surged by about 2-million barrels per day (bpd) in 2018 to a record 11.7-million bpd.

Official US fuel storage data from the Energy Information Administration (EIA) is due at 6pm GMT on Wednesday.