June 27, 2019 / 1:33 AM / 2 months ago

Oil edges higher ahead of G20, OPEC meeting

NEW YORK (Reuters) - Oil prices edged higher on Thursday on expectations that OPEC will extend an output cut agreement, while investors awaited a meeting between the United States and China that could produce a breakthrough on trade talks.

A pumpjack is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann

Brent crude futures rose 6 cents to settle at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 5 cents to settle at $59.43 a barrel.

The Organization of the Petroleum Exporting Countries is expected to roll over a deal on cutting supplies at a meeting next week and discuss deepening the curbs, Iraq’s oil minister said.

Sources told Reuters this month that Algeria had floated an idea of deepening the cut by some 600,000 barrels per day.

A deal between OPEC and its allies, including Russia to curb output by 1.2 million bpd, runs out at the end of June. Meetings on July 1-2 in Vienna will discuss the next steps.

The OPEC meeting will follow the G20 summit this weekend.

“If we don’t see OPEC extend its production agreement and the U.S. and China leave the G20 with more problems, this rally up to one-month highs could stop,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

U.S. President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports if the two countries don’t agree.

“It’s clear that investors are a little cautious when it comes to this meeting, given how talks collapsed previously and the fighting talk we’ve since seen from both sides,” said Craig Erlam, analyst at OANDA.

Tensions between the United States and Iran have also kept the market on edge. Iran is on course to breach a threshold in its nuclear agreement within days by accumulating more enriched uranium than permitted, although it had not done so yet by a deadline it set for Thursday, diplomats said, citing U.N. inspectors’ data.

When asked about Iran possibly breaching those restrictions, U.S. Special Representative on Iran Brian Hook said it was clear there would be consequences.

Elsewhere, the government of Canada’s main crude-producing province, Alberta, eased crude oil production curtailments for August on Thursday, setting the limit at 3.74 million bpd, compared with 3.71 million bpd in July.

GRAPHIC-U.S. crude inventories, weekly changes since 2017, click tmsnrt.rs/2XlX17b

Additional reporting by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing by David Gregorio and Marguerita Choy

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