NEW YORK (Reuters) - Oil prices rose on Tuesday after China signaled progress in trade talks with the United States and OPEC and its allies mulled deeper production cuts, but gains were capped by forecasts of a buildup in U.S. crude stockpiles.
Brent crude oil settled up 74 cents, or 1.3% at $59.70 a barrel, while U.S. West Texas Intermediate crude was 85 cents, or 1.6%, higher at $54.16 per barrel.
OPEC and its allies plan to consider whether to deepen cuts to crude supply when they next meet in December due to worries about weak demand growth in 2020, sources from the oil-producing club said.
Traders said the possible supply cut pushed prices higher, but gains were muted as the market contended with concerns about demand.
Washington and Beijing have made progress in trade talks, China’s Vice Foreign Minister Le Yucheng said, and problems can be resolved as long as both sides respect each other.
“While the encouraging mood across financial markets will remain stimulated by trade optimism, risk aversion could still make an abrupt return should talks drag on or turn sour,” said Lukman Otunuga, analyst at FXTM.
GRAPHIC: Purchasing managers' indexes, manufacturing here
The International Monetary Fund last week forecast that fallout from the U.S.-China trade war and trade disputes across the world would slow global growth in 2019 to 3.0%, the weakest in a decade.
Lower economic growth typically squeezes demand for commodities such as oil.
Prices were also pressured by forecasts of a buildup in U.S. crude stockpiles, and moved lower in post-settlement trade after industry group the
