LONDON (Reuters) – Oil prices rose on Monday on hopes for a Sino-American trade deal but gains were capped by weak Chinese industrial data.
Brent crude was up 26 cents, or 0.4%, at $62.28 a barrel by 1337 GMT.
West Texas Intermediate (WTI) crude rose 20 cents, or 0.3% to $56.86 a barrel.
Both had fallen around 0.5% earlier in the session.
U.S. President Donald Trump said he expected to sign a significant part of a trade deal with China ahead of schedule but did not elaborate on the timing.
“We are looking probably to be ahead of schedule to sign a very big portion of the China deal, we’ll call it Phase One but it’s a very big portion,” he told reporters.
The news comes as a relief to investors who have been grappling with the fallout from the trade war and its impact on the global economy. Analysts say an agreement would provide a boost to global oil demand.
“Looking further ahead, if trade talks continue to progress, and we see full agreement to phase 1 of the deal, this should help to improve sentiment further,” ING analyst Warren Patterson said.
Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued to slide, highlighting the impact of a slowing economy and protracted U.S. trade war on corporate balance sheets.
U.S. energy companies reduced the number of oil rigs operating this week, leading to a record 11-month decline as producers follow through on plans to cut spending on new drilling.
Russia’s energy ministry said that OPEC and its oil-exporting allies, known as OPEC+, would factor in the slowdown of U.S. oil output growth when they meet to discuss their output agreement in December.
However, Russian Deputy Energy Minister Pavel Sorokin said it was premature to talk about deeper production cuts.
OPEC+ has since January implemented a deal to cut output by 1.2 million bpd to support the market. The pact runs to March 2020 and the producers meet to review policy on Dec. 5-6.
“We are of the view that an extension of current cuts is path of least resistance for the producer group, while deeper cuts will be far more difficult to agree on,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London said