2019.11.1509:24:00UTC+00Oil Prices Fall In Choppy Trade

Oil prices edged lower in choppy trade on Friday after an unexpected increase in crude inventories. The downside, however, remained capped by optimism over OPEC supply cuts and positive signals about U.S.-China trade talks.

Benchmark Brent crude dropped 0.65 percent to $61.88 a barrel, while West Texas Intermediate crude futures were down 0.45 percent at $56.52 a barrel.

Data released by the Energy Information Administration on Thursday showed that oil inventories in the U.S. increased by 2.2 million barrels in the week ended November 8, exceeding the 1.649 million-barrel rise forecast by analysts.

Gasoline inventories were up by nearly 1.9 million barrels in the week while distillate stockpiles dropped by larger than expected about 2.5 million barrels.

On the positive side, OPEC's forecast for oil demand next year fueled hopes that the producer group and allies might have to deepen their supply cuts at their December meeting.

Fresh hopes of a trade deal between Washington and Beijing turned risk assets higher today after White House economic adviser Lawrence Kudlow told reporters the U.S. and China are getting close to a 'phase one' agreement on trade.

He cited 'very good progress' but added President Donald Trump isn't ready to make a commitment.

Investors also welcomed a goodwill gesture by China lifting a nearly five-year ban on imports of U.S. poultry meat, a move that could lead to more than $1 billion in annual shipments to China.