Oil prices steady as China-US trade tensions ease

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Oil ministers said the cuts would be from October production levels except for Kuwait and that Iran, Venezuela and Libya - at risk of output declines due to US sanctions, economic collapse and unrest, respectively - were not required to reduce supply.

"The oil market is regaining further ground this morning in the wake of a bullish API report concerning USA oil stockpiles", said Stephen Brennock, an analyst at PVM Oil Associates Ltd.in London.

On Wednesday, the oversold WTI crude oil came to a standstill below a strong resistance area of $52.30. Brent crude is down almost 30 percent from its October highs of more than $86.

Both reports come less than a week after OPEC agreed with its nonmember partner producers - led by Russian Federation - to collectively cut crude output by 1.2 million barrels a day starting in January.

OPEC cuts: sufficient or not?

Crude remains in a bear market after slumping from a four-year high in early October, even though OPEC and its allies have pledged substantial output cuts to check a growing surplus.

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Yet it seems the relentless increase in USA production is countering these tailwinds.

In a sign that China wants to lower trade tensions with the United States, the country made its first major US soybean purchases in more than six months on Wednesday.

All of these factors have helped OECD oil inventories to rise in October for the fourth month in a row, their highest level since January, the IEA said. OPEC includes Algeria, Angola, Venezuela, Gabon, Iran, Iraq, Congo, Kuwait, Qatar, Libya, the United Arab Emirates, Nigeria, Saudi Arabia, Equatorial Guinea and Ecuador.

Citi, meanwhile, sees oil going nowhere in 2019 and staying at $60 a barrel. The UAE, Opec's fourth largest producer, has been pumping around 3.0 million bpd. But some remain bullish yet - Japan's MUFG views Brent and U.S. West Texas Intermediate (WTI) to be "oversold", predicting a "sharp rebound" in coming months, while Societe Generale forecasts Brent at $73 for both 2018 and 2019.

"The energy complex is drifting lower as sellers continue to bask in the bearish afterglow of yesterday's (U.S.) stats", PVM Oil analyst Stephen Brennock said. USA stockpiles fell by more than 10 million barrels last week, the industry-funded American Petroleum Institute was said to report before government data that's forecast to show a smaller drop December 12.

The International Monetary Fund and the Organisation for Economic Cooperation and Development expect the global economy to expand more slowly next year than forecast six months ago.

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