Oil Holds Firm As US-China Talks Enter Crucial Phase

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That said, Thursday also offered signs that some countries are determined to ramp up production for their own economic gains, which could ruin the forecasts of the experts: Vadim Yakovlev, first deputy chief executive for Russian oil producer Gazprom Neft, was quoted in a magazine published Thursday as saying his company expects its oil output to rise by 2 percent this year.

The U.S. dollar index, which includes the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.51 percent on January 30, according to official data.

The agency also said that US crude stockpiles had built for a fifth straight week, climbing by 3.7 million barrels last week to 455 million barrels.

That means U.S. crude output has soared by nearly 2.5 million bpd since the start of 2018, and by a whopping five million bpd since 2013. Global stocks ticked up Friday and US stocks were also pointed higher, with most major benchmarks remained on course to close out the week higher on the back of investor optimism that the USA and China could soon reach a deal to resolve their continuing trade dispute.

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OPEC and some non-affiliated producers such as Russian Federation agreed late a year ago to cut output by 1.2 million bpd to prevent a large supply overhang from growing.

"The U.S. -China trade talks boosted prices with the promise of higher energy demand if global growth gets back on track", said Alfonso Esparza, senior market analyst at OANDA.

"All in all the report is bearish, in particular the strong increases in crude oil stocks", said Cartsen Fritsch, analyst at Commerzbank in Frankfurt. "While a glut is taking hold in USA crude stocks, product stockpiles inched lower thanks to robust domestic demand", Mr. Brennock added.

Prices have also been supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

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US West Texas Intermediate (WTI) crude oil futures were at $56.84 per barrel, down 12 cents, or 0.2 percent, from their last settlement. The group, known as OPEC+, agreed in December to cut output by 1.2 million bpd to prevent a crude supply glut from growing.

Another price driver has been United States sanctions against oil exporters Iran and Venezuela.

However, U.S. energy firms cut four oil rigs operating this week after three weeks of adding rigs, General Electric Co's Baker Hughes energy services firm said in its report on Friday. That makes it "the only country ever to reach this milestone", said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd.

That means much will depend on demand, which Goldman said it expected to grow by 1.4 million bpd this year.

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