By Roslan Khasawneh
SINGAPORE, Dec 13 (Reuters) - Oil prices extended gains on
Friday, scaling three-month highs as the United States and China
moved closer to a resolution to the 18-month trade war between
the world's two biggest economies that has raised big questions
about global demand for crude.
Brent futures LCOc1 climbed 48 cents, or 0.8%, to $64.68 a
barrel by 0221 GMT, its highest since Sept. 23.
West Texas Intermediate (WTI) crude CLc1 was up 36 cents,
or 0.6%, to $59.54 a barrel, the highest since Sept. 16.
While a trade deal that would end uncertainty could provide
a shot in the arm for oil demand in the near term, concerns
continue to hover about the demand profile amid ample supplies
going forward.
"Lingering doubts about demand will cap the upside on
prices," said ANZ Bank in a note on Friday.
In the meantime the White House has agreed to suspend some
tariffs on Chinese goods and reduce others in return for
Beijing's pledge to hike purchases of U.S. farm products in
2020, sources said on Thursday. But the White House didn't release any official statement,
raising questions about whether the terms had been agreed by
both sides.
Looking further ahead, an International Energy Agency report
on Thursday pointed to future pressure on oil prices, predicting
a sharp rise in global inventories despite an agreement by the
Organization of the Petroleum Exporting Countries (OPEC) and its
allies to deepen output cuts. That contrasts with OPEC's own research, which forecasts a
small deficit in the market next year due to Saudi Arabia's
supply restraint even before the latest cut agreement takes
effect. Elsewhere, Norway's oil output in November hit a 32-month
high at 1.71 million barrels per day, the Norwegian Petroleum
Directorate (NPD) said on Thursday. "While the current (U.S.-China) trade deal will most
probably limit demand devastation, it might not be enough to
counter an oversupplied market in early 2020, hence the possible
reason we are not seeing a massive bounce in oil prices now,"
said Stephen Innes, market strategist at AxiTrader.