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Oil prices increase as China opens up for trade talks with US

The oil prices rose in the early Asian hours of Friday, after China announced that it was open to talks with the United States. This raised hopes for a deescalation of the bitter trade war between two world's largest economies.

Brent crude futures increased 38 cents or 0.6% to $62.51 per barrel at 0136 GMT. U.S. West Texas Intermediate Crude futures also rose 38 cents or 0.6% to $59.62 per barrel.

China's Commerce Ministry said on Friday that the United States had recently taken steps to start a dialog with Beijing through information being passed along by relevant parties.

Oil prices have been impacted by recent concerns that the broader global trade war may push the world economy into a depression and crimp demand for oil, at the same time as OPEC+ is preparing its output increase.

The sentiment toward crude oil was boosted by the signs of a possible easing of trade tensions between China and the United States, the largest importer of crude in the world.

The threat by Donald Trump, the president of the United States, to impose secondary sanction on Iranian oil buyers also supported oil prices.

ANZ analysts wrote in a report that the threat of a tighter crude supply had them worried.

Trump's remarks followed the postponement by the United States of talks with Iran about its nuclear program. He had earlier restored a campaign of "maximum-pressure" against Iran. This included efforts to reduce the country's exports of oil to zero to prevent Tehran from developing nuclear weapons.

The oil prices rose late Thursday to close nearly 2% higher, erasing the earlier losses on the expectation of more OPEC+ supplies.

On Wednesday, it was reported that Saudi Arabia - the de facto leader in OPEC+ - had informed allies and industry professionals that they were unwilling to support oil prices by cutting further supplies.

Earlier reports said that several OPEC+ countries are planning to propose the group accelerates production increases in June for a 2nd consecutive month. On May 5, eight OPEC+ members will gather to discuss a plan for June. (Reporting and editing by Shri Navaratnam in New York)

(source: Reuters)