Oil up on China meeting, OPEC cuts

Oil prices gained on Monday in Asia following reports that U.S. President Donald Trump is likely to hold talks with Wang Qishan, China’s vice president, at the World Economic Forum later this month in Davos.

The meeting would follow another round of trade talks scheduled to start in Beijing on Monday between U.S. and Chinese officials, the South China Morning Post reported, citing people familiar with the matter.

Citing two people familiar with the preparations, Bloomberg said the talks would focus on issues including intellectual property, agriculture and industrial purchases. Preliminary discussions have been “a little more optimistic than usual,” White House economic adviser Larry Kudlow told Bloomberg on Friday.

U.S. West Texas Intermediate Crude Oil WTI Futures gained 1.7% to $48.76 by 1:27 AM ET (06:27 GMT).

International Brent Oil Futures were up 1.5% at $57.91 a barrel.

While oil traders continued to monitor developments in U.S.-China trade talks, supply levels also captured market attention after signs of falling supply last week supported prices.

The Organization of the Petroleum Exporting Countries cut crude output in December, a Reuters survey showed, and the American Petroleum Institute reported a 4.5 million-barrel drop in crude inventories.

Oil prices received some support recently as supply cuts announced by the global coalition of producers known as OPEC+ kick in.

OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million barrels per day (bpd) in 2019. OPEC’s share of that cut is 800,000 bpd.

Looking ahead, the American Petroleum Institute is set to publish its weekly update on U.S. oil supplies on Tuesday. The U.S. Energy Information Administration will release its weekly report on oil stockpiles a day after.