Investing.com - Oil prices were up Friday morning in Asia with news that North Korean leader Kim Jung Un would meet with U.S. President Donald Trump.
Crude Oil WTI Futures for April delivery were trading at $60.23 a barrel in Asia at 10:50pm ET, up 0.18%. Brent Oil Futures for May delivery, traded in London, were up 0.25% at $63.77 per barrel.
South Korea’s national security chief briefed White House officials on talks between Seoul and Pyongyang on Thursday, and said that Kim has pledged to refrain from further nuclear or missile tests. Kim and Trump would likely meet by May at a place and time to be determined. The White House said Trump would accept the invitation.
Asian stock markets rose following the news, pulling crude oil futures along with them.
Beyond geopolitics, oil markets were mainly affected by soaring output from the U.S., which has risen by 23 percent since mid-2016 to 10.37 million barrels per day (bpd).
U.S. oil production has already surpassed that of top exporter Saudi Arabia, and is expected to surpass that of top producer Russia by 2019.
This would pose a significant challenge for the Organization of the Petroleum Exporting Countries, which has been trying to prop up oil prices by cutting output.
OPEC has been reducing output by around 1.2 million barrels per day (bpd) since January 2017. However, the U.S. has simply taken the market share from OPEC producers by ramping up production, dragging down prices.
Oil markets remained volatile due to excess supply. The American Petroleum Institute estimated inventories had risen by 5.66 million barrels last week, further weakening oil prices amid growing concerns that a trade war is on the horizon.
Major powers including the European Union and China have warned that the Trump administration’s new protectionist import tariffs could lead to retaliatory action, triggering a global trade war that could bring economic growth to a standstill. This would, by extension, drag down oil consumption.