UK Markets closed

UPDATE 6-Oil rises on reports that OPEC might extend cuts, U.S.-China talks to continue

By Bozorgmehr Sharafedin

* OPEC+ likely to extend oil supply cuts until June - sources

* China says it will strive to reach trade deal with U.S.

* U.S. passes Hong Kong rights bills, adding to tension with China (Updates prices, adds report on South China Morning Post)

By Bozorgmehr Sharafedin

LONDON, Nov 21 (Reuters) - Oil prices rose on Thursday following a Reuters report that OPEC and its allies are likely to extend output cuts until mid-2020, while fresh reports emerged that China had invited U.S. trade negotiators for a new round of talks.

Brent crude was up 63 cents, or 1%, at $63.03 a barrel by 1437 GMT, while West Texas Intermediate crude rose 76 cents, or 1.3%, to $57.77.

Both benchmarks had fallen earlier in the session.

To support oil prices, OPEC and its allies are likely to extend output cuts when they meet next month with non-OPEC producer Russia, according to OPEC sources.

The sources told Reuters that formally announcing deeper cuts looked unlikely for now although a message about better compliance with existing curbs could be sent to the market.

Russian President Vladimir Putin said on Wednesday Russia and OPEC had "a common goal" of keeping the oil market balanced and predictable, and Moscow would continue cooperation under a global deal cutting oil supply.

Amid rising tensions between the United States and China, U.S. President Donald Trump is expected to sign two bills passed by Congress intended to support protesters in Hong Kong, a move likely to anger China.

A Reuters report said completion of a "phase one" U.S.-China trade deal could slide into next year.

"Under this scenario, both equities and oil are expected to come under pressure. As talks hit a snag, an upside breakout from the current trading range all of a sudden has become less imminent," Tamas Varga of oil brokerage PVM said.

However, the Chinese commerce ministry said that China would strive to reach a "phase one" trade agreement with the United States.

The Wall Street Journal also reported on Thursday that China had invited top U.S. trade negotiators for a new round of talks in Beijing, citing unnamed sources.

A report in the South China Morning Post said the United States could delay tariffs on Chinese imports even if a deal was not reached by Dec. 15. (https://bit.ly/2rhuyV7)

Trade conflict, weak business investment and persistent political uncertainty are weighing on the world economy, the Organisation for Economic Cooperation and Development (OECD) warned on Thursday, noting the global economy was growing at its slowest pace since the financial crisis.

"In the short term, oil demand is directly tied to global GDP growth and thus the ongoing uncertainty surrounding U.S.-China trade talks will hamper global growth," said Ehsan Khoman, head of MENA research and strategy at MUFG. (Reporting by Bozorgmehr Sharafedin in London, addiotioanl reporting by Koustav Samanta in Singapore; Editing by Dale Hudson, Elaine Hardcastle, Pravin Char)