Average price of oil will drop to $67 per barrel in 2019

Goldman cuts 2019 crude price view; sees recovery from current levels

Trade talks with China are "going very well", President Donald Trump said in a tweet, even as his Chinese counterpart, Xi Jinping, dispatched one of his top aides to negotiations in Beijing.

Oil rallied for a seventh day as US negotiators touted progress in trade talks with China and investors gained faith that OPEC will shrink output.

The world's largest crude oil seller exported around 7.3 mbpd of crude in December and 7.9 mbpd in November, according to the report.

With drilling activity still high, most analysts expect US oil production to rise further this year. Gasoline stocks rose by 6.9 million barrels, more than thrice the expected increase.

"The market is clearly rebounding from sharply oversold territory", said Michael Tran, commodities strategist at RBC Capital Markets LLC.

Futures in NY increased as much as 1.6% following six days of gains, the longest streak of increases since July 2017. Futures for the USA benchmark contract posted the lengthiest win streak since an eight-session period ended July 3, 2017.

Beyond politics, oil markets are being supported by supply cuts started late past year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member Russian Federation.

Brent for March settlement gained $1.32 to $58.65 on the ICE Futures Europe Exchange in London.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $48.56 per barrel, up 4 cents, or 0.1 percent.

“Progress in trade talks, softening of the Fed's stance, and a surprisingly good jobs report last week, have all, added to the impression that the demand side of the equation could also help to support energy prices, ” Yawger wrote. The global benchmark crude traded at an $8.66 a barrel premium to WTI for the same month.

U.S. Commerce Secretary Wilbur Ross said Monday that China and the U.S. could get "a reasonable settlement" that both countries "can live with", according to worldwide media.

"There a confluence of factors helping-a big driver is progress in trade talks and hopes that global growth will be supported", said Stephen Innes, head of trading for Asia Pacific at Oanda Corp. "And so we see the potential for Brent crude to go to $70 a barrel over the course of the year".

Record high crude oil production has also pushed up United States inventories, which rose by almost 17 per cent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday. Nationwide inventories are near their lowest level in nearly two months.

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