Oil price falls 1% on indecisive US-China trade talks, rising stocks

Trader Gregory Rowe works on the floor of the New York Stock Exchange Wednesday Jan. 9 2019. Stocks are opening higher on Wall Street putting the market on track for a fourth gain in a row

Trade talks in Beijing between the world's two biggest economies entered the third day on Wednesday, amid signs of progress on issues including purchases of U.S. farm and energy commodities and increased United States access to China's markets. Shares rose Taiwan, Singapore and Malaysia but fell in the Philippines.

The Dow Jones Industrial Average .DJI rose 169 points, or 0.71 percent, to 23,956.45, the S&P 500 .SPX gained 17.27 points, or 0.67 percent, to 2,591.68 and the Nasdaq Composite .IXIC added 76.86 points, or 1.11 percent, to 6,973.86.

MSCI's all-country index.MIWD00000PUS climbed 1.14 percent for a fourth day of gains.

On the demand side, the US and China have continued their trade negotiations in Beijing since Monday. The meetings in Beijing this week were not at a ministerial level, so were not expected to produce a deal to end the trade war.

"China and the USA managing to agree on a positive deal would favour further risk-on sentiment within markets over the short-term".

The U.S. stock market, which oil futures have tracked closely, was also mostly flat after a four-day rise. Still, prices are about 30 percent lower than their highs in October even after a rebound since Christmas Eve thrust crude back into a bull market.

American benchmark West Texas Intermediate (WTI) was at $50.37 a barrel at the same time, seeing a 0.8 percent daily gain, after ending the previous session at $49.99 per barrel.

"Sentiment is greatly improved, and trade talk optimism has helped boost risk-appetite across the week", said Jasper Lawler, head of research at London Capital Group in a note on Friday, although he added that at this stage "there is a lack of anything concrete between the USA and China".

CHINESE INFLATION: On Thursday, China released consumer and producer inflation figures that missed the mark.

"The pessimism of market participants at the end of the year was excessive, and so we expected prices to rise", said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.

London-traded, the global oil benchmark, was down 0.2% at $61.53 after rising to $61.91 earlier, also the highest so far for this year. Slowing inflation is not a good sign, as it raises questions about the health of the world's second largest economy.

Oil headed for its biggest weekly gain in over two years on hopes that OPEC will manage to shrink a glut and trade tensions between the US and China will ease.

Global benchmark Brent crude traded at $61.84 per barrel at 11.57 GMT on Friday while the price of American benchmark West Texas Intermediate (WTI) was $52.87 per barrel at the same time. Brent crude, used to price global oils, shed 11 cents to $61.57 per barrel.

CURRENCIES: The dollar eased to 108.38 yen from 108.43 yen late Thursday. The euro rose to $1.1559 from $1.1543.

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