Oil prices steady amid hopes for U.S.-China trade deal

TOKYO (Reuters) – Oil prices were steady on Tuesday, holding onto gains from the previous session, after positive comments from the United States and China kept alive hopes that the world’s two largest economies are soon to agree an end their trade war.

Brent crude futures LCOc1 were down 1 cent at $63.64 at 0121 GMT, after rising 0.4% in the previous session.

West Texas Intermediate crude CLc1 was down 3 cents at $57.98, having risen 0.4% on Monday.

China and the United States are “moving closer to agreeing” on a “phase one” trade deal, the Global Times – a tabloid run by the Chinese Communist Party’s official People’s Daily – reported.

“While a phase one agreement has yet to be signed, and the terms still unclear, the path toward de-escalation and cancellation of tariff hikes … is nevertheless positive for markets,” J.P. Morgan said in a note.

Still, the Global Times report noted that Washington and Beijing had not agreed on specifics or the size of rollbacks of tariffs on Chinese goods. Beijing’s insistence that Washington roll back the Trump administration’s tariffs has been a major sticking point.

On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) meets on Dec. 5 at its headquarters in Vienna, followed by talks with other oil producers, including Russia, that combined with the cartel make up the OPEC+ group.

The broader producer group is widely expected to extend a supply cut to mid-2020.

“We assume OPEC+ extends output cuts to the end of 2020,” J.P.Morgan said.