Oil steadied on signs of progress in trade talks between the U.S. and China, and estimates that American crude inventories retreated for the first time in five weeks.
Source: Houston Chronicle
Futures traded little changed near $58 a barrel in New York. Washington and Beijing “reached consensus on properly resolving relevant issues” to pursue a “phase one” trade deal during a phone call on Tuesday, China’s Ministry of Commerce said. U.S. oil stockpiles fell by 939,000 barrels last week, according to a Bloomberg survey before official data due Wednesday.
Crude has been rising since early October on the thaw in trade hostilities between the world’s two largest economies, although investors are becoming increasingly fatigued over how long the negotiations are taking. Traders are also concerned that OPEC and its allies seem unwilling to cut production further when they meet next week, despite signs of a renewed surplus in early 2020.
“The optimism that the trade conflict will at least ease somewhat is currently preventing prices from falling,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt.
West Texas Intermediate for January delivery rose 7 cents to $58.08 a barrel on the New York Mercantile Exchange as of 10:39 a.m. London time. The contract advanced 24 cents to settle at $58.01 a barrel on Monday.
Brent for January settlement slipped 5 cents to $63.60 a barrel on the London-based ICE Futures Europe Exchange, after adding 0.4% on Monday. The global benchmark traded at a $5.67 premium to WTI.
U.S. crude inventories probably fell to 449.4 million barrels in the week through Nov. 22, according to the Bloomberg survey. That would still be the highest level since July as the country’s oil output keeps rising.
