Venezuela oil tankers. Picture: BLOOMBERG
Venezuela oil tankers. Picture: BLOOMBERG

London — Oil prices edged up slightly on Monday after rising expectations of a US-China trade deal boosted benchmarks in the previous session.

Brent crude futures for January rose 15 US cents to $61.84 a barrel by 9.48am GMT, erasing earlier losses. December US crude futures also swung back into positive territory, rising 11c to $56.31 a barrel.

Chinese President Xi Jinping and US President Donald Trump have been in continuous touch through “various means”, China said on Monday, when asked when and where the two leaders might meet to ink a trade deal.

Prices had jumped about $2 a barrel on Friday after the world's top two economies said they had made progress on trade talks while US officials said the deal could be signed this month.

“For all of Friday’s feel-good factor, there is no guarantee that they will put pen to paper before the end of the year. This could be problematic given that US tariffs planned for December 15 remain on the table,” PVM analysts said in a note.

Capping gains, euro zone factory activity contracted sharply last month as demand was whacked by the trade war and by the continued lack of clarity over Britain's departure from the EU, a survey showed.

The US are set to announce manufacturing data on Monday with more US and Chinese data to come later in the week.

Underlying weakness keeps lurking.

“The oil market faces ample supplies with global demand almost stagnant and supplies rising from the US, Canada, Brazil and even the North Sea,” said Norbert Rücker, head of economics at Swiss bank Julius Baer.

“We ... see oil prices trading about $60 per barrel in the near term and lower longer term.”

In a bid to prop up oil prices, production cuts by Opec, Russia and other producers since January have reduced oil output by 1.2-million barrels per day.

Still, Russia again exceeded its output target in October, energy ministry data showed on Saturday.

Opec's output recovered in October from an eight-year low after a rapid rebound in Saudi Arabia's production from attacks on its oil infrastructure in September offset losses in Ecuador and voluntary cuts under the pact.

Protests at Iraq's main Gulf port Umm Qasr on Saturday blocked the country's food imports but did not affect the second-largest Opec producer's oil exports.

Saudi Aramco finally kick-started its initial public offering on Sunday, but valuations vary by more than $1-trillion, according to fund managers.

Reuters